Woolworths Group Ltd (ASX: WOW) share price in focus after reporting its FY25 result.
Woolworths is one of the largest retailers in the country, with the Woolworths supermarket business, New Zealand food, a business to business (B2B) segment, BIG W, Petstock and a few others.
Woolworths FY25 result
Here are some of the highlights from the 12 months to 29 June 2025:
- Sales grew 1.7% to $69 billion
- Underlying EBIT (EBIT explained) fell 14.6% to $2.75 billion
- Underlying net profit declined 19.1% to $1.38 billion
- Underlying earnings per share (EPS) fell 19.1% to $1.135
- Statutory net profit increased $855 million to $963 million
- Final dividend per share down 21.1% to $0.45
- Full-year ordinary dividend down 21% to $0.84
The result was partially impacted by FY25 only having 52 weeks compared to the 53 weeks of FY24. Without that, sales would have grown 3.6%, underlying EBIT would have declined by 12.6% and underlying net profit has dropped 17.1%.
During the year, the company suffered from industrial action in its Australian food division, which cost $95 million in the first half.
Let’s look at how some of the individual businesses performed.
Australian food
In the Australian food division, sales grew by 1.2% to $51.4 billion, with normalised (for 52 weeks) sales growth of 3.1%.
The business said that customer scores improved in the fourth quarter compared to the third quarter, with “improving retail execution, improved value perception, as well as fewer external disruptions”.
eComX sales increased by (a normalised) 17.4% in FY25, with e-commerce penetration of overall sales ending at a new high of 15.1%.
Its EBIT declined 12.6% to $2.75 billion, or a decline of 10.5% when normalised. Excluding the impact of industrial action and supply chain costs, EBIT would have declined by a normalised 5%. The EBIT decline was “broadly flat” in the fourth quarter.
EBIT was hurt by a lower gross profit margin, as well as wage increases and a lower mix of in-store sales. This is the key division for the Woolworths share price.
Australian B2B
In the B2B division, which includes PFD, sales grew 2.7% to $5.7 billion.
The EBIT grew by 12.4% to $137 million. The company attributed this result to margin improvements at PFD and double-digit earnings growth from its third-party supply chain business, PC+.
New Zealand food
In New Zealand dollar terms, sales grew by 1.5% to NZ$8.3 billion. Sales grew as the rebranding to Woolworths and ‘transformation initiatives’ continued to resonate with customers, translating into item growth.
E-commerce delivered normalised sales growth of 17.1% in FY25.
The EBIT grew by 38.3% to NZ$150 million. Part of this strength came from a recovery from the 57.2% EBIT decline in FY24.
W Living
This division, which includes BIG W, saw sales increase by 8% to $5.6 billion. BIG W’s quarterly sales growth rates increased during the year, helped by more affordable options and seasonal clearance which led to lower average selling prices.
The EBIT of this segment worsened by 113.4% to $63 million. This was because of a BIG W loss of $35 million. Petstock’s FY25 EBIT was $44 million in the first full year of ownership, though it had to sell some stores and vet clinics as part of an undertaking to the ACCC.
Outlook for the Woolworths share price
In the first eight weeks of FY26, the Australian food segment saw total sales increase by 2.1%. Excluding tobacco, total sales rose 4%.
New Zealand total sales increased by 2.6%, impacted by short-term competitor promotional activity.
BIG W total sales in the first eight weeks were “broadly flat”, cycling significant clearance activity in the prior year.
It’s expecting Australian food to return to “mid to high single digit reported EBIT” in FY26. But, it’s also seeing an accelerated decline in tobacco sales, expected to lead to an impact of between $80 million to $100 million. There’s also $60 million of costs related to the end-of-life replacement cycle of core retail systems.
The company is also expecting further improvement in the financial performance in FY26 with the New Zealand food business.
In the medium-term, it said it wants to deliver sustainable mid to high single-digit EBIT growth.
I can see why the Woolworths share price has dropped 13%, there’s some disappointing news in the outlook and it traded on a fairly high valuation for what is expected. There are other ASX dividend shares I’d rather buy which could grow more.
