Woolworths Reports Sales Growth And Strong Cash Generation Despite Tough Trading Conditions

Source: www.woolworths.co.za

The group achieved turnover and concession sales growth of 5.4%, rising to 6.1% on a constant currency basis, with all businesses delivering positive sales and profit growth despite constrained trading conditions in South Africa and Australia.

Adjusted earnings before interest and tax (aEBIT) increased 2.5% to R2.9bn, while aEBITDA rose 3.2% to R4.6bn. On a constant currency basis, aEBIT and aEBITDA were up 4.1% and 4.2%, respectively. Adjusted diluted earnings per share increased 3.8% to 170 cents on the same basis.

The board declared an interim dividend of 118 cents per share, up 10.3% year-on-year, supported by a sector-leading payout ratio. Disciplined capital allocation also enabled the repurchase of 6.9 million shares at an average price of R51.23, while maintaining a robust balance sheet. Cash generation strengthened, with a cash conversion ratio of 110%.

Group CEO Roy Bagattini said the results reflect tangible progress in strategic initiatives.

“Our first-half results demonstrate that we are clearly and deliberately shifting the trajectory of our businesses. I am confident in our ability to deliver an improved performance for the full year and beyond,” he said.

Woolworths South Africa: Above-market growth

Woolworths South Africa delivered 6.8% turnover and concession sales growth, outperforming the market despite subdued consumer confidence and easing inflation.

Woolworths Food

The food business once again led performance, growing turnover and concession sales by 7.0%, with comparable-store growth of 5.2% and consistent market share gains.

The division continues to benefit from its premium positioning, innovation credentials, and advanced cold chain capabilities. Online momentum remains strong, with Woolies Dash revenue increasing 23%, and digital now contributing 7.2% of SA Food sales. The “Woolies After Dark” initiative has extended trading hours to midnight in more than 70 locations.

Operating profit growth was moderated to 3.5% due to increased depreciation from the Midrand distribution centre expansion and continued investment in growth initiatives. However, aEBITDA rose 7.0%, and return on capital employed (ROCE) remained best-in-class at 41%.

Group CEO Roy Bagattini. Source: www.businessday.co.za

Fashion, Beauty and Home (FBH)

FBH delivered sector-leading total and comparable sales growth of 6.2% and 6.4%, supported by improved product availability following multi-year value chain transformation initiatives.

Home and Beauty were standout performers, growing sales by 14% and 8.9%, respectively, with continued market share gains.

Gross margins were impacted by price investment in kidswear, clearance of excess inventory, and forex adjustments from a stronger rand. As a result, aEBIT rose 1.0% to R771m, while aEBITDA increased 4.5% to R1.2bn. Excluding forex effects, profit growth would have been materially stronger.

Woolworths Financial Services (WFS)

WFS maintained the healthiest impairment ratio in the sector at 6.4%, reflecting disciplined credit management. The loan book grew 1.8% year-on-year, or 2.6% excluding the sale of part of the legal book, driven by quality new accounts and selective credit limit increases.

Country Road Group (CRG)

In Australia, Country Road Group delivered an improved result despite persistent promotional intensity and high inflation.

Sales increased 2.3% (2.5% comparable), with operating profit up 4.2% to A$14.8m, benefiting from brand portfolio repositioning and operating model restructuring. Gross margins remained under pressure due to elevated promotions and inventory clearance initiatives.

Strategic investments and recognition

Gross margins across the group were tempered by price investments, promotional activity, and channel mix shifts toward lower-margin categories. However, expenses were tightly managed to preserve positive profit growth.

Woolworths Ventures, the Group’s strategic growth accelerator, continued to drive double-digit sales growth, while the group received multiple awards for innovation, sustainability and leadership, including “Business of the Year” at the Standard Bank Top Women Awards and “Top Employer for 2026” from the Top Employers Institute.

Outlook

While early signs of macroeconomic recovery are emerging in South Africa, inflationary pressures and recent interest rate hikes in Australia may continue to weigh on consumer confidence there.

Despite these headwinds, WHL says its strengthened operational foundation and clear strategic focus position the group to deliver improved full-year performance and sustained long-term growth.

The first-half results underscore a business balancing disciplined capital allocation, strategic investment and shareholder returns — while delivering positive sales and profit growth across all divisions.

View the full interim results via the SENS Announcement.