Woolworths Holdings saw a 24.8% decline in headline earnings per share (HEPS) for the first half of its financial year, mainly due to weaker performance in its apparel division. While group turnover and concession sales increased by 5.7% to R40.3 billion, slower-than-expected sales in Fashion Beauty Home (FBH) and the Country Road Group (CRG) negatively impacted profit margins. Additionally, increased operating expenses related to the company’s transformation initiatives contributed to a 6.4% drop in adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) to R4.5 billion. Although profits for the period improved to R2.2 billion due to a lower tax expense, Woolworths declared an interim dividend of 107 cents per share, reflecting a 27.7% decrease from the previous year.
The food division was the standout performer, with turnover and concession sales rising by 11.4% overall and 7.3% on a comparable-store basis. Excluding Absolute Pets, which was acquired in the previous financial year, food sales grew by 9%, supported by continued market share expansion. Woolies Dash, the company’s on-demand grocery platform, recorded a 49.2% increase in sales, while total online food sales climbed by 37.2%, contributing 6.4% of total food revenue. However, supply chain disruptions, late supplier deliveries, and the implementation of new distribution systems affected Woolworths’ apparel business. These setbacks led to reduced product availability across stores during the festive season, limiting sales growth.
In Australia and New Zealand, the apparel segment faced tough market conditions, with Country Road Group sales declining by 6.2% and comparable-store sales falling by 7.8%. Weak consumer spending and an increasingly competitive retail environment contributed to these losses. Following the sale of David Jones in 2023 and the separation of CRG in 2024, Woolworths is now restructuring CRG to establish a more sustainable operating model. Looking ahead, economic uncertainty remains a challenge, with the impact of global trade policies adding to South Africa’s macroeconomic risks. Australia’s retail sector is expected to remain highly promotional until inflationary pressures ease. In response, Woolworths plans to reassess underperforming brands within Country Road Group in the second half of the financial year while continuing to drive growth in its food division.