Woolworths (WHL) H1 2025 earnings summary

Executive summary

• Group sales and turnover rose 5.7% year-over-year to ZAR 40.3 billion, driven by strong Food business performance but offset by weaker apparel results and transformation costs.

• Adjusted EBIT declined 13.7% to ZAR 2.8 billion, and adjusted diluted headline EPS dropped 19.4% to 169.1cps, reflecting margin pressure and higher operating expenses.

• The sale of the Melbourne/Bourke Street property generated a significant profit, boosting EPS by 20.9% to 245.4cps and strengthening the balance sheet.

• Net borrowings reduced to ZAR 4.7 billion, with net debt/EBITDA at 1.37x, within target range.

Financial highlights

• Adjusted EBITDA was ZAR 4.5 billion, down 6.4% year-over-year; adjusted EBIT was ZAR 2.8 billion, down 13.7%.

• Adjusted profit after tax declined 20%, and adjusted HEPS dropped 19.4% to 169 cents per share.

• Interim dividend declared at 107 cents per share, down 27.7% year-over-year, maintaining a 70% payout ratio.

• Return on capital employed at 17%, above cost of capital but lower than last year.

• Net asset book value per share at 1,313c.

Outlook and guidance

• Cautious macro outlook due to global trade risks and persistent cost pressures, especially in Australia.

• Food sales in the first eight weeks of H2 up 12.2%, with price movement expected between 4%-5%.

• Asset impairment review planned for underperforming Country Road Group brands in H2.

• Management expects apparel business benefits to flow more in FY26, with FY25 being a peak year of disruption.

• Confident in strategic objectives and positioned for cyclical recovery in consumer spending.