The Woolworths Group Ltd (ASX: WOW) share price is down 1% after the company announced its FY25 half-year result.
Woolworths HY25 result
Below are some of the financial highlights from the first six months of the FY25 result compared to the HY24 report:
- Sales rose 3.7% to $35.9 billion
- Underlying EBITDA declined 4% to $2.96 billion
- Underlying EBIT dropped 14.2% to $1.45 billion
- Underlying net profit after tax (NPAT) sank 20.6% to $739 million
- Statutory net profit of $739 million (up from a loss of $781 million in HY24)
- Interim dividend per share down 17% to $0.39
The business experienced $1.7 billion of significant items in the HY24 result, but there were none this year, which is why the underlying and statutory net profit of $739 million for this HY25 result is the same.
Woolworths revealed that its group e-commerce sales increased by 18.3% to $4.68 billion
Let’s look at the individual performances of the different businesses. First, sales:
- Australian supermarket sales grew 2.7% to $26.7 billion
- Australian business to business (B2B) sales increased 5.5% to $3 billion
- New Zealand food sales grew 2.7% to NZ$4.3 billion
- W Living sales rose 16.1% to $3.08 billion
The profit of these divisions is arguably even more important. The following numbers are presented on an underlying basis:
- Australian food EBIT declined 12.8% to $1.39 billion
- Australian B2B EBIT rose 9.9% to $78 million
- New Zealand food EBIT improved 15.2% to NZ$82 million
- W Living EBIT grew 2.8% to $15 million
The Woolworths supermarkets division experienced industrial action in November and December which impacted sales by $240 million and there was also a $95 million of an EBIT hit related to the sales hit and additional costs of the industrial action.
The B2B division experienced grow largely thanks to PFD sales, with growth across all channels, particularly quick service restaurants (QSR) – fast food.
Outlook for the Woolworths share price
In the first seven weeks of the second half of FY25, the company said Australian food has seen sales growth of 3.3%, driven by a more stable environment and cycling slower growth in the prior corresponding period. It recently opened the new Moorebank distribution centre, which will ramp up service to over 1,000 supermarkets across Australia.
In New Zealand food, total sales momentum continued compared to the first half of FY25, with sales up 4%.
BIG W sales have increased by approximately 1% with item growth remaining strong but offset by lower average selling prices.
With the Woolworths share price down 15% from August 2024, this could be the right time to look at the business if investors are interested in the company. I’m not expecting a lot of growth in the long-term, so it’s not one I’m expecting to buy. Dividend cuts don’t appeal to me. There are other ASX dividend shares I’d rather buy.
