Full Year 2026 Woolworths Group Ltd Earnings Call Transcript
Key Points
- Group sales increased 3.6% to $71.5 billion, with group EBIT up 12.7% and NPAT up 15.4%.
- Australian Food sales grew 4.6% in FY26, accelerating to 5.7% in H2, driven by item growth and improved customer transactions.
- E-commerce sales grew 15.9% (17.2% in H2), with e-commerce EBIT up 70.3% and DAP up 99%.
- BIG W returned to profitability with EBIT of $64 million, a $97 million improvement year-over-year.
- Group ROCE improved to 16.4%, up 2.7 points, and net debt-to-EBITDA improved to 2.5x.
- Delivered above-store cost savings of approximately $400 million, with CODB as a percentage of sales declining 22 basis points in Australian Food.
- Complementary businesses (PETstock, PFD, Cartology, etc.) contributed around one-third of group EBIT growth.
- Strong early FY27 trading: Australian Food sales up 7.6% in first 8 weeks, with momentum continuing.
- Moorebank supply chain precinct performing well, with NDC fully operational and RDC ramping up ahead of expectations.
- Dividend increased 15.5% to $0.97 per share, with payout ratio at 74.1%.
- Group EBIT growth benefited from cycling industrial action; excluding this and supply chain costs, EBIT growth was 8.7%.
- Australian Food gross margin declined 20 basis points (excluding tobacco) due to price investment and input cost pressures.
- New Zealand H2 EBIT declined 7.7% due to sales slowdown, store operating model disruption, and higher stock loss.
- BIG W sales growth was modest at 0.9%, and early FY27 sales declined modestly due to cost-of-living pressures.
- Customers remain under significant financial pressure, with over 40% struggling to make ends meet and value-seeking behaviors elevated.
- Wage growth remains elevated, including increases for 18- and 19-year-old team members, pressuring costs.
- Other segment losses increased 23.4% to $260 million, driven by lower property disposal gains and higher costs.
- Significant items after tax of $461 million, largely related to remediation of award-covered salary team members.
- New Zealand trading conditions expected to remain subdued, with hyper-competition and customer pressure.
- Tobacco sales remain volatile and impacted by illicit market, with no clear recovery expected.
Thank you for standing by, and welcome to the Woolworths Group FY26 full-year earnings announcement. (Operator Instructions) I would now like to hand the conference over to Amanda Bardwell, Managing Director and CEO of Woolworths Group. Please go ahead.
Good morning, everyone. Thank you for joining us today for Woolworths Group's full year results for the 2026 financial year. I'd like to start by acknowledging the traditional custodians of the land on which we meet today, Dharug Country, and I'd like to pay my respects to Elders past and present. Joining me this morning are Stephen Harrison, our Chief Financial Officer; Annette Karantoni, Managing Director of Woolworths Retail; Amitabh Mall, Managing Director of Group eComX; Sally Copland, Managing Director of Woolworths New Zealand; and Dan Hake, Managing Director of BIG W. I will start with an overview of the group's performance in the year and share the progress we've made against our strategic priorities.
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