Woolworths (WHL) H1 2026 earnings summary

Executive summary

• Group sales and turnover grew 6% in constant currency (5.4% in reported terms), outpacing inflation, with all business segments gaining market share and outperforming their respective markets despite challenging conditions in Southern Africa and Australia.

• Strategic investments in core infrastructure, leadership changes, and operational improvements drove top-line momentum, improved earnings, and validated FY 2025 as the trough year.

• Strong cash generation and improved free cash flow were supported by working capital release, normalization of apparel inventory, and disciplined capital allocation.

• Sustainability, diversity, and innovation remain central, with recognition for gender equality and top employer status.

• Share buyback program commenced, with 6.9 million shares repurchased at an average price of R51.23.

Financial highlights

• Group turnover and concession sales reached R42.5bn, up 6.1% in constant currency (5.4% reported); Woolworths South Africa sales rose 6.8%.

• Adjusted EBITDA was R4.6bn (+4.2% in constant currency), adjusted EBIT R2.9bn (+4.1%), and adjusted diluted HEPS 170.3cps (+3.8% in constant currency, +0.7% reported).

• Interim dividend per share increased 10.3% to 118.0cps, with a payout ratio of 70%.

• Free cash flow per share was R2.31, more than triple last year; cash conversion ratio reached 110%.

• Net borrowings at R5.8bn; net debt/EBITDA at 1.48x, within covenants.

Outlook and guidance

• Expect continued earnings improvement as foundational investments yield results and CapEx cycle peaks.

• Food price movement for H2 forecast at 3%-4% (excluding meat); FBH price movement expected at 3%-3.5%.

• H2 FY26 trading: Food sales +5.4%, FBH +12.1%, CRG +1.6% year-over-year in first eight weeks.

• Macro conditions in South Africa show early improvement, but consumer spend remains constrained; Australia remains challenging.