The day after Coles Group presented its positive FY25 results from profits to staff morale and customer satisfaction, it was Woolworths turn with investors, but with a far less happy tale. Its 17 per cent drop in net profit due to underwhelming performance of Australian supermarkets (consumers are still not trusting the fresh food people) and the albatross known as Big W, made CEO Amanda Bardwell’s reassurances and positive spin feel precarious at worst and vaguely hopeful at best.
Snapshot
Group sales: $69.1b, up 3.6% pcp;
Group eCom sales: $9.1b, up 17.1% pcp;
Group EBIT: $2.7b, down 12.6% pcp;
Group NPAT: $1.3b, down 17% pcp; and
Final dividend: 45c, down 21.1% pcp.
Bardwell said the fall in net profit was also due to impacts from industrial action over the Christmas period.
She told investors the group was investing in lowering shelf prices on everyday items, increasing specials and absorbing cost price increases in key categories, while also improving its retail execution and product availability to ensure a better shopping experience.
The company is also targeting significant cost savings through headcount reductions, reviewing goods not for resale, and optimising operational processes.
The group told investors that excluding the impact on Australian Food of industrial action of $95 million in H1, incremental supply chain commissioning and dual-running costs of $73 million and the acquisition of Petstock in the prior year, Group EBIT would have declined by 7.8 per cent on a normalised basis. Group H2 EBIT excluding incremental supply chain
commissioning and dual-running costs would have declined by 7.5 per cent on a normalised basis.
The W Living segment – BIG W, Petstock, Woolworths MarketPlus and Healthylife – sales
increased by a normalised 9.9 per cent with a segment loss of $63 million compared to a loss of $29 million in FY24. It said the higher loss was due to a BIG W loss of $35 million in F25 compared to EBIT of $14 million in F24, offset by a full year contribution from Petstock.
While BIG W’s quarterly sales growth rates increased across the year, they were driven by a higher mix of more affordable options and seasonal clearance. That led to lower average selling prices, which impacted gross margin and EBIT, recording a loss of $35 million.
Bardwell was frank in her assessment, “Big W’s performance is very disappointing, and we believe that the team has a strong transformation plan, and that plan started last year,” she said.
It feels like Big W is to Woolworths what its Premium Wines division is to Treasury Wine Estates – consumers aren’t buying the products and companies won’t pay an acceptable price to take it off your hands, so you just keep changing the lipstick colour while being constantly reminded it is still a pig.
Much of the reassurance echoed that from the interim results when Bardwell announced $400 million in cuts, this time in the context of FY26 being a transitional year.
“In F26 we expect to return to profit growth following a disappointing F25. We will continue to rebuild customer trust through compelling value and retail execution excellence, simplify the way we work and become a more focused, lower-cost retailer with a differentiated Food offer at our core.
“Some of this will take time but I am confident that the strength of our brands, assets and team can see us deliver a much-improved performance. I also wanted to acknowledge and thank our team for their efforts during a period of significant disruption and change,” Bardwell said.
