Woolworths announced annual results showing net profit of $1.14bn, representing a $175m increase from the prior year. The company’s market capitalization surged by $2bn following the announcement, briefly exceeding $50bn for the first time since 2021.
The Australian supermarkets division generated sales of $53.85bn, up 4.6% year-over-year, with profit margins expanding to 5.5% from 5.3%. Pre-tax earnings across the group rose $232m to $2.95bn. Online sales demonstrated stronger momentum, rising 15.9% as the company expanded in-store pickup and on-demand delivery options. Big W, the company’s department store chain, returned to profitability with pre-tax earnings of $64m, improving from a $33m loss in the prior year.
Chief Executive Amanda Bardwell attributed the margin expansion to increased customer traffic and higher transaction volumes rather than price increases on supermarket shelves. She noted that consumers have shifted into a period of “entrenched value seeking” driven by persistent cost-of-living pressures. Margin improvements were supported by administrative cost reductions and declining inventory losses, including reductions in theft following the installation of exit gates and trials of facial recognition technology in New Zealand.
The Ooshies promotional campaign, which offered Disney character collectibles with qualifying purchases, significantly boosted sales during the eight-week period following its July launch, contributing approximately 2% to growth or over $120m in incremental sales. However, Big W experienced declining sales in recent weeks despite the promotion, which Woolworths attributed to ongoing household budget pressures and weaker performance in its Everyday business category. Bardwell indicated the Ooshies program would not run continuously throughout the year.
The results follow Coles’ announcement of improved profit margins to 5.7%, representing the highest level since at least 2019. Both supermarket chains have faced criticism regarding profit margins during periods of elevated inflation, which rose 3.8% in the year to June.
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