Woolworths Profit Rises 15% as Cost Cuts Offset Lower Food Margins
Synopsis
Woolworths Group reported a 15.4% rise in full-year profit to $1.59 billion, helped by cost cuts, stronger sales and improved performance across its key businesses.
Key Highlights
- Woolworths reported a 15.4% rise in full-year profit to $1.59 billion before significant items
- Group sales increased by 3.6% to $71.5 billion.
- The division grew sales 4.6% to $53.85 billion, though profit margins remained under pressure.
- Woolworths has also handsomely increased its total dividend to 97 cents per share, a gain of 15.5%.
Woolworths Reports Strong Profit Growth
Woolworths Group posted a 15.4% full-year net profit of $1.59 billion pre-significant items. For the 52 weeks to June 28, 2026 group sales were up 3.6% to $71.5 billion. The Group EBIT before significant items was up 12.7% to $3.1 billion. Post-one-off net profit increased by 18% to $1.14 billion.
Australian Food Business Grows
Sales for the Australian Food business rose 4.6% to $53.85 billion and EBIT increased 8.5% to $2.95 billion Through its Lower Shelf Price program, Woolworths invested over $100 million in price reductions on more than 800 products. The investment weighed on gross margins which declined to 28.6% within the meals enterprise.
Productivity gains and cost efficiencies mitigated some of that pressure, with the EBIT margin in Australian Food improving to 5.5%. Online sales have also held up, growing 15.9% to $10.6bn.
BIG W Returns to Profit
BIG W is a really big turnaround story over the year, going from a $33m EBIT loss in FY25 to $64m profit in FY26.
EBIT for W Living, which includes home and everyday products, was $116 million, a year-on-year up of $147 million. The retailer’s EBIT growth was underpinned by contributions from all its trading businesses, Woolworths said.
Sales Start FY27 Strongly
In the first eight weeks of FY27, Australian Food Retail sales increased 7.6%. Woolworths stated that its Disney Ooshies collectibles had contributed 1.5 to 2 percentage points of the country’s expansion.
CEO Amanda Bardwell said customers are probably still going to be looking at value with household budgets stretching under pressure. The company forecast that wage costs would remain high including Australia’s 4.75 annual rise in wages and higher pay rates for some younger retail workers.
Outlook for the Year Ahead
The company expects trading conditions to be difficult, with customers able to continue seeking lower prices.
The company will address higher costs through improved efficiency and rigour with technology, while maintaining investment in pricing, product choice and convenience. Full-year food sales in New Zealand lifted 2.5% on a constant currency basis, but Woolworths expects conditions there to remain tough.
BIGW is expected to deliver in a tough backdrop too as the retailer works on focusing on improving store offering and strengthening ranges while also executing targeted price cuts. It came after the Woolworths board declared a final dividend of 52 cents per share, taking total FY26 dividends to 97 cents per share.
Source: Businessnews Australia
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