Woolworths (WHL) H2 2024 earnings summary

Executive summary

• Group sales grew 4.3% year-on-year, driven by strong food and financial services, but offset by weaker Fashion, Beauty, and Home (FBH) and a significant decline in Country Road Group (CRG) due to tough macro conditions, especially in Australia.

• The sale of David Jones was completed, transforming the group’s balance sheet and enabling capital reallocation to core businesses.

• Strategic investments and initiatives are underway across all segments, focusing on operational efficiency, digital growth, and sustainability.

• Robust balance sheet and strong cash generation position the group for future growth.

Financial highlights

• Group turnover and concession sales reached ZAR 76.4 billion, up 4.3% year-on-year (52-week comparable, excluding David Jones).

• Adjusted EBIT declined 14.1% to ZAR 5.8 billion, mainly due to CRG’s performance and increased investments.

• Adjusted diluted HEPS fell 12.2% to 375.4cps, mitigated by a lower tax rate and share buybacks.

• Total dividend for the year was ZAR 2.655 per share, with a payout ratio of 60%-70%.

• Free cash flow of ZAR 2.6 billion generated; net borrowings at ZAR 5.6 billion.

Outlook and guidance

• Food sales momentum has accelerated in the first eight weeks of FY25, up 13.3% (10.9% excluding Absolute Pets).

• FBH full price sales up 4.8% in early FY25, with clearance sales down 5.7%; H1 price movement forecast 5.0%-5.5%.

• CRG margin guidance revised to 10%+ due to loss of shared services synergies; internal ambitions remain higher.

• FBH EBIT margin target remains above 14% in the medium term, with gains expected from FY26/27 as value chain transformation delivers.

• Macro conditions in South Africa are improving, but Australia’s recovery is expected to be slow.