Woolworths (WHL) H2 2025 earnings summary

Executive summary

• FY 2025 was challenging due to macroeconomic headwinds and significant transformation, especially in apparel, with strong Food segment performance and H2 recovery in Fashion, Beauty and Home (FBH) offset by weak Country Road Group (CRG) results.

• Group turnover and concession sales increased by almost 7% year-over-year, but adjusted EBIT fell 10.9% and adjusted diluted HEPS dropped 19%.

• Strategic investments and restructuring, including CRG and operational separation from David Jones, are now complete, positioning the group for long-term sustainable growth.

• Recognized for brand strength, sustainability, and social impact in Africa.

• Strategic focus shifts from turnaround to growth, leveraging a strong brand and completed transformation.

Financial highlights

• Group turnover and concession sales reached ZAR 81 billion, up over 6% year-over-year; adjusted EBITDA was ZAR 8.7 billion, down 3.8%; adjusted EBIT ZAR 5.2 billion, down 10.9%.

• Adjusted diluted HEPS declined 19% to ZAR 3.03 per share; total dividend ZAR 1.88 per share (-29.2%).

• Net borrowings held at ZAR 5.6 billion; net debt/EBITDA at 1.46x, within covenants.

• Free cash flow of ZAR 1.9 billion; cash conversion rate of 83%.

• R2.0bn dividends distributed (70% payout ratio).

Outlook and guidance

• Food sales growth for the first seven weeks of FY 2026 at 6.9%, FBH sales up 8.3%, CRG sales up 1.2%.

• FY26 expected to deliver improved group performance, resuming margin targets: Food >7%, FBH >12%, CRG >10%.

• Inventory levels expected to normalize; CapEx to decrease to ZAR 2.7 billion in FY 2026.

• CRG expected to return to positive earnings growth, more skewed to H2 FY 2026.

• Macro environment expected to remain constrained in both South Africa and Australia.