Woolworths (WHL) H2 2026 earnings summary

Executive summary

• FY 2026 was challenging due to macroeconomic headwinds, Middle East conflict, and local disruptions, but the group delivered 4.8% sales growth and improved profitability.

• Foods business outperformed, gaining profitable market share and maintaining sector-leading returns, while Fashion, Beauty, and Home (FBH) underperformed due to margin pressure and weak demand.

• Country Road Group (CRG) in Australia returned to profitability, aided by inventory reduction, brand repositioning, and operational reset.

• Improved inventory management led to strong cash generation and a cleaner base for FY27.

• Strategic reset underway to focus on food-led growth, operational simplification, and disciplined capital allocation.

Financial highlights

• Group sales grew 4.8% in constant currency to ZAR 84.5 billion; H2 growth slowed to 3.4%.

• Adjusted EBITDA rose 3.1% to ZAR 8.9 billion; adjusted EBIT up 3.2% to ZAR 5.3 billion.

• ADHEPS increased 4.6% to ZAR 3.15 per share; total dividend up 5.9% to ZAR 1.99 per share.

• Free cash flow reached ZAR 4 billion, with cash conversion at 105%.

• ROCE improved to 17%, up 60 bps; Woolworths SA at 24.4%.

Outlook and guidance

• Near-term trading conditions expected to remain challenging in both South Africa and Australia.

• Initiatives underway to mitigate trade risks and maximize opportunities.

• Medium-term guidance to be updated at next results; focus on food-led growth and portfolio optimization.

• FY27 first seven weeks: Food sales up 3.2%, FBH up 1.7%, CRG down 7.7% year-on-year.