Woolworths Earnings and Dividend Fall, Yet Food Growth Offers Hope for WHL Share Price
Woolworths posted a steady rise in turnover but continues to face pressure from weak earnings, margin headwinds, and a challenging consumer
Quick overview
- Woolworths reported a 6.8% increase in turnover to R81 billion for the six months ended June 2025, despite facing weak earnings and margin pressures.
- The food division showed strong growth, particularly in online sales, while the fashion and Australian operations struggled with declining margins and consumer demand.
- Headline earnings per share fell by 23.9%, leading to a significant cut in dividends as the company navigates a challenging consumer environment.
- Management is focusing on digital expansion and stabilizing the Australian business to drive long-term growth amid ongoing economic uncertainties.
Woolworths posted a steady rise in turnover but continues to face pressure from weak earnings, margin headwinds, and a challenging consumer environment in South Africa and Australia.
Woolworths’ latest results show a company still finding its footing. While the food division and digital platforms remain bright spots, pressure from softer earnings, weaker consumer sentiment, and margin erosion in Australia continues to weigh on overall performance.
Share Price and Market Reaction
On Wednesday, Woolworths announced a 6.8% increase in turnover and concession sales to R81 billion for the six months ended 30 June 2025. The market reaction was volatile. The share price initially dropped by 2.5% in early trade, slipping just below R49, before rebounding later in the session to close at R52.42, a gain of 2.26%.
WHLJ Chart Monthly – Finding Support Below R50 Since March
This movement reflects broader uncertainty among investors, who have watched the stock lose significant value since its 2015 peak above R108. Although a rebound between 2020 and 2023 brought some relief, the downtrend has since resumed, leaving Wednesday’s recovery as a tentative signal that support may finally be forming near moving averages.
Operational Performance
Woolworths’ FY2025 results painted a mixed picture. The food retail division, long considered the group’s crown jewel, once again delivered robust growth, underpinned by the company’s strong positioning in premium food and the continued expansion of its online channels. Both the food and the fashion, beauty and home divisions recorded double-digit growth in online sales, reinforcing management’s push toward digital as a long-term growth engine.
The challenges, however, are equally evident. The fashion business and the group’s Australian operations under the Country Road banner faced margin pressures and weaker consumer demand. In Australia, high levels of promotional activity combined with a weaker currency added to costs, compressing profitability. These headwinds highlight the fragility of consumer spending in both of Woolworths’ core markets, where higher living costs and subdued confidence continue to limit discretionary spending.
Woolworths H1 Interim Earnings Report
Overall Group Performance
- Turnover & concession sales: Up 6.8% YoY to R81 billion (52 weeks ended 30 June 2025).
- Headline earnings per share (HEPS): Fell 23.9% to 268.1 cents, pressured by weak discretionary spending and subdued consumer sentiment.
- Dividend: Board declared a final dividend of 81 cents per share, down 31.1%.
- Full-year dividend: 188 cents, down 29.2% from 2024’s 265.5 cents.
Segmental Performance
Food Division
- Turnover & concession sales: Up 11%, showing resilience in essentials.
- Woolies Dash (on-demand platform): Surged 41.6%, highlighting strong adoption.
- Online food sales: Increased 32.9%, contributing 6.6% to total food sales.
Fashion, Beauty & Home (FBH)
- Turnover & concession sales: Up 4.7%.
- Online FBH sales: Rose 22.8%, contributing 6.6% to total FBH sales.
Australia – Country Road Group
- Gross profit margin: Declined to 56.4%.
- Key pressures: Heavy promotional activity in a competitive market and higher input costs from a weaker Australian dollar.
Earnings, Dividends and Macro Headwinds
Earnings came under pressure, with headline earnings per share falling sharply, while dividends were cut to reflect weaker profitability. The board declared a final dividend lower than the prior period, underscoring the strain that soft consumer conditions and global uncertainties are placing on the group.
Despite inflation cooling and interest rates beginning to ease, Woolworths noted that both South Africa and Australia continue to struggle with low business and consumer confidence. The risk of further global trade disruption, including the possible fallout from higher U.S. tariffs, also adds to the cautious outlook.
Strategic Priorities and Outlook
Group CEO Roy Bagattini highlighted Woolworths’ resilience, pointing to the premium food division as a consistent performer and stressing that the heavy investment of recent years has left the company better placed to extract value from its portfolio of established brands. Management is focusing on digital expansion, efficiency gains, and a stabilisation of the Australian business, which remains under pressure but is central to long-term growth plans.
Looking ahead, much depends on the company’s ability to sustain momentum in its food operations, continue scaling its digital platforms, and rebuild margins in the fashion and Australian divisions. The fundamentals of the business remain intact, but the pace of recovery will likely hinge on improving consumer confidence and a more stable global economic backdrop.
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