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WOOLWORTHS HOLDINGS LIMITED - Audited Group Results for the 52 weeks ended 28 June 2026 and Cash Dividend Declaration

Woolworths Holdings Limited
Full analysis

What this filing means

A guidance-met result with a visibly softer second half. Woolworths delivered HEPS of 282.3cps, up 5.3% and inside the 274.8–288.2cps range it guided on 30 July, while adjusted diluted HEPS of 314.7cps cleared the mid-point. The quality is mixed: Food held margin and grew above market, but FBH aEBIT fell 14.1% on 130bps of gross margin compression, and CRG is barely profitable at A$2.3m. Cash conversion of 104.5% is the standout, but the share had already sold off 10.4% into the print, so the H2 deceleration was not arriving cold.

Woolworths made slightly more profit than last year and hit the range it told the market to expect, so there is no shock here. The real story is that the second half got harder — the war in the Middle East pushed up fuel and inflation, shoppers got more careful, and the clothing and home business saw its profit fall sharply. The food business is still the engine, and the company turned more of its profit into actual cash, which is genuinely good. But the share had already fallen a lot before this, so the market was not expecting great news.

Bull case

  • Adjusted diluted HEPS of 314.7cps cleared the mid-point of the FY26 guidance range, with HEPS of 282.3cps also landing within range.
  • Cash conversion jumped to 104.5% from 82.5%, generating free cash flow of 449.4cps despite a tougher H2.
  • Food delivered above-market growth of 5.7% while holding gross margin flat at 24.9% despite fuel-driven distribution cost pressure.
  • CRG returned to full-year profitability with aEBIT of A$2.3m and gross margin expanding 130bps to 57.7%.
  • ROCE improved to 17.0% from 16.4%, an increase of 60bps reflecting stronger capital productivity across the group.

Bear case

  • FBH aEBIT fell 14.1% to R1,375m with gross margin compressed 130bps to 46.0%, exposing negative operational leverage in H2.
  • WFS impairment rate rose to 7.0% from 6.1%, with the issuer attributing this to a deteriorating macroeconomic environment in H2.
  • Group sales growth decelerated to 3.3% in H2, with the issuer describing a 'particularly challenging final quarter'.
  • Filing provides no FY27 guidance or quantified cost-saving targets despite explicit flagging of Middle East war and rate-rise headwinds.
  • The filing provides no FY27 guidance and does not quantify the ongoing impact of Middle East-related cost pressures or further rate rises on FY27 earnings.
View original SENS announcement

AI-generated summary by SENS-AI, based on the original JSE SENS filing.

SENS-AI conclusion

A confirmation print: HEPS of 282.3cps and adHEPS of 314.7cps land inside the 274.8–288.2cps and 306.4–321.6cps ranges the company guided on 30 July, so there is no surprise on the headline numbers. The H2 deterioration in FBH — aEBIT down 14.1% and gross margin compressed 130bps to 46.0% — is a genuine negative, not a paper one, and the WFS impairment rate rising to 7.0% from 6.1% adds further caution. The CAR-20 of -10.4% shows the share was selling off hard ahead of this print, so the market was already pricing macro and execution concerns rather than being caught flat — the confirmation of H2 weakness therefore reinforces a known deterioration rather than creating a new one. Cash conversion at 104.5% and Food's above-market 5.7% growth are real positives that keep the overall result from deteriorating further. The read is balanced: not a disaster, but not a recovery signal either, with the FBH margin reset and CRG sustainability remaining open questions. So what: the guidance was met and cash generation is strong, but the market still needs FY27 guidance and evidence that the FBH margin compression is stabilising before this becomes a conviction-positive read.

The next trading update is where the market will test whether FBH margin stabilises and whether CRG's return to profit is sustainable.

Evidence from the filing

  • FBH aEBIT fell 14.1% to R1,375m with gross margin compressed 130bps to 46.0%, exposing negative operational leverage in H2.

    “aEBIT decreased by 14.1% to R1 375 million, implying an adjusted EBIT margin of 8.6% for the period”

  • WFS impairment rate rose to 7.0% from 6.1%, with the issuer attributing this to a deteriorating macroeconomic environment in H2.

    “annualised impairment rate for the year ended 30 June 2026 increased to 7.0%, compared to 6.1% in the prior period”

  • Group sales growth decelerated to 3.3% in H2, with the issuer describing a 'particularly challenging final quarter'.

    “Growth in the second half, however, slowed to 3.3%, reflecting a particularly challenging final quarter.”

  • Adjusted diluted HEPS of 314.7cps cleared the mid-point of the FY26 guidance range, with HEPS of 282.3cps also landing within range.

    “Adjusted diluted headline earnings per share: 314.7cps (+3.7% on LY)”

  • Cash conversion jumped to 104.5% from 82.5%, generating free cash flow of 449.4cps despite a tougher H2.

    “cash conversion increasing to 104.5% from 82.5% in the prior period, and generating Free Cash Flow of 449.4cps”

  • Food delivered above-market growth of 5.7% while holding gross margin flat at 24.9% despite fuel-driven distribution cost pressure.

    “Food business continued to deliver above-market turnover and concession sales growth of 5.7%”

  • CRG returned to full-year profitability with aEBIT of A$2.3m and gross margin expanding 130bps to 57.7%.

    “full-year gross profit margin improved by 130bps to 57.7%”

  • ROCE improved to 17.0% from 16.4%, an increase of 60bps reflecting stronger capital productivity across the group.

    “Return on capital employed: 17.0% (16.4% LY)”
Category
Results
Event posture
No Edge
Published
Sep 2, 2026

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