Woolworths shares tank as Jarden predicts consensus downgrades
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More news: Woolworths shares tumbled in morning trade after the supermarket giant reported a 19% drop in full-year profit.
Shares were down 14.6% to $28.55 at 11am AEST, taking 12-month losses to 19.5%.
Jarden analysts said the full-year result was broadly in line with expectations, but the group's weak FY26 trading update and guidance implies "mid-single digit consensus downgrades".
What they said: "Disappointing result, with not a lot of good news in there, with no signs of improving traction with the consumer post price cuts and no evidence of cost-out yielding any return via direct profit boost or return from reinvestment," the analysts said.
"Question now will be if something more fundamental needs to be done to get shoppers back into store as it does not appear, on face value, that [Woolworths'] loyalty, price and network investment is yielding the results it should."
Woolworths sees full-year profit slump 19%, cuts dividend
The news: Woolworths’ full-year net profit decreased by 19.1% year on year as the supermarket giant warned that "current trading remains below our ambition" following a "highly disrupted first half" to the year.
The numbers: Net profit after tax came in at $1.39 billion, lower than the $1.71 billion reported in FY24, but edging out consensus estimates of $1.38 billion, according to Visible Alpha data.
Woolworths’ full-year revenue came in at $69.08 billion, which is 3.6% higher than the $67.92 billion reported in FY24, but behind average forecasts of $69.21 billion.
A final dividend of 45 cents per share was declared, behind the expected 46.2 cents per share. In FY24, a final dividend of 57 cents was declared alongside a special dividend of 40 cents per share.
The context: Woolworths CEO Amanda Bardwell said the company expects to return to profit growth in FY26 following a "disappointing" FY25.
She addressed a soft result for the group's discount department store BIG W, which swung to a loss of $35 million. She said the company has begun a process to unlock BIG W from Woolworths' technology platforms to enable different systems "appropriate for a discount department store".
"For BIG W, we have reviewed the performance and have plans in place to improve FY26 results," Bardwell said. "We understand the challenges of this sector but also recognise the potential to grow in categories such as Everyday, Pet and Health and Beauty."
In its first eight weeks of FY26, Woolworths' core Australian food division saw total sales increase by 2.1% compared to the prior corresponding period. Excluding tobacco, sales lifted 4% year on year, with growth driven by eCommerce. BIG W sales in the first eight weeks of the year were "broadly flat".
Woolworths is targeting "mid to high single-digit" reported EBIT growth in FY26. However, the company said it is facing near-term challenges that will impact that growth, including a "material acceleration" in the decline in tobacco sales, expected to impact EBIT by $80-100 million.
What they said: "Our current trading performance has been below our ambition with customers continuing to cross shop to find the best value," Bardwell said.
"We acknowledge that it will take time for the full benefits of the actions we have taken and current priorities to be realised. We are also making progress on returning to the level of customer and retail execution excellence that we expect but there remains more to do."
