Woolworths Limited (ASX:WOW) has posted a solid first-half sales rebound, with total revenue climbing 3.4% to $37.14 billion as the supermarket giant regains its footing against rival Coles and reaffirms its full-year earnings guidance.
The result came in marginally shy of analyst expectations for 3.6% growth, but the trajectory was encouraging — particularly in the second quarter, where Australian supermarket sales accelerated to 3.2% growth, up from a sluggish 2.1% in the opening three months of the year.
Management attributed the improvement to sharper pricing, an expanded fresh food range, greater convenience offerings, and strong execution across the critical Christmas trading window.
“We are making progress on the strategy we outlined in August and have invested in value, our fresh offer, On Demand convenience and in-store execution. All customer metrics have improved, trading momentum is stronger and we are seeing market share stabilise, Woolworths Group CEO, Amanda Bardwell, said.
“As we look to H2, trading in Q3 to date has been strong in Australian Food; however, customers continue to be value-focused, shopping multiple retailers in a highly competitive environment. Our focus is to continue to provide value to customers, rebuild trust and maintain sales momentum while making further progress on our strategic priorities to deliver for our customers, team and shareholders.”
Profit headline masked by legacy costs
Net profit rose 16.4% to $859 million on a headline basis, but significant items of $485 million — tied to prior staff underpayment remediation — left statutory net profit at $374 million for the half.
The company's core Australian Food division, which encompasses approximately 1,100 supermarkets, e-commerce operations, rapid delivery service Milkrun, and complementary services including insurance and mobile, posted earnings growth of nearly 10% to $1.5 billion.
Woolworths declared an interim dividend of 45 cents per share.
Strategy gaining traction
Chief executive Amanda Bardwell, who laid out her strategic priorities in August, said the business is making tangible progress. Investments in value, fresh produce, on-demand convenience, and in-store standards are bearing fruit, with customer metrics improving and market share beginning to stabilise.
Looking ahead, Woolworths expects full-year earnings at the Australian Food division to come in at the upper end of the mid-to-high single-digit range flagged in August, buoyed by the strengthening trading momentum heading into the second half.