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Group Sales Growth: 6% in constant currency. EBIT Growth: Just over 4% in constant currency. Adjusted EBITDA: ZAR4.6 billion, up 4.2% in constant currency. Adjusted EBIT: ZAR2.9 billion, up 4.1% in constant currency. adHEPS: ZAR1.70 per share, increased by 3.8% in constant currency. Interim Dividend: ZAR1.18 per share, a 10% increase. Net Borrowings: ZAR5.8 billion. Net Debt-to-EBITDA Ratio: 1.48x, including lease liabilities. Cash Conversion Ratio: 110%. Return on Capital Employed: 16.6% for the group; 25.7% for Woolworths South Africa. Woolworths South Africa Sales Growth: 6.8%. Food Business Sales Growth: 7% total; 5.2% like-for-like. Fashion, Beauty and Home Sales Growth: 6.2% total; 6.4% like-for-like. Beauty Business Sales Growth: 8.9%. Home Business Sales Growth: 14%. Country Road Group EBIT: AUD14.8 million, up 4.2% in Australian dollars. Free Cash Flow: Over ZAR2 billion. Share Buybacks: ZAR356 million repurchased at an average price of ZAR51.23 per share.

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Release Date: March 04, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Woolworths Holdings Ltd (WLWHY) reported a 6% increase in group sales in constant currency, outperforming inflation and respective markets. The company's Food business achieved strong results, gaining profitable market share month-on-month and delivering leading returns on capital. The Fashion, Beauty, and Home (FBH) segment showed significant improvement, with market share gains and strong sales growth, particularly in the denim offering. Woolworths Financial Services (WFS) delivered a strong underlying result with the healthiest impairment ratio in the industry. The company has made significant investments in foundational infrastructure, which are now translating into improved operational performance and cash flow.

Negative Points

Gross profit margins faced pressure due to significant capital investments, excess inventory clearance, and pricing investments in key categories. The company experienced a more moderate EBIT growth of just over 4% in constant currency, partly due to ForEx impacts. The retail sector in Australia remains challenging and highly promotionally driven, impacting the Country Road Group's performance. Expense growth in the Woolworths South Africa businesses was ahead of sales growth, driven by strategic investments and higher depreciation charges. The company faced challenges from foot and mouth disease impacting meat pricing and volumes, affecting overall inflation numbers.

Story Continues

Q & A Highlights

Q: Your GP margin in FBH is down on last year. How much of this can be ascribed to your price investment in kids? And how confident are you that this is still the right strategy? A: Roy Bagattini, CEO: It's still early days, but the results are encouraging. We've gained market share in kidswear despite lower pricing, and our volume has increased significantly. We believe this strategy is right as it enhances our brand and drives cross-shop opportunities.

Q: Your momentum in the Foods business seems to have slowed compared to competitors. Can you comment on this? A: Roy Bagattini, CEO: Our momentum has picked up slightly in H2 compared to the end of H1. However, growth has slowed due to weather impacts on fresh produce and reduced meat volumes from foot and mouth disease. Despite this, we continue to outperform the market in like-for-like sales.

Q: What is the current inflation in Food, and why is your price movement higher than competitors? A: Roy Bagattini, CEO: Inflation for the first 8 weeks of H2 is in line with H1, expected between 4% to 5%. Our higher inflation is due to our product mix, particularly in meat, which has seen significant price increases due to foot and mouth disease.

Q: Expense growth in WSA businesses is ahead of sales growth. What caused this, and can costs be better controlled in H2? A: Zaid Manjra, CFO: Expense growth was expected due to strategic investments and higher employee costs. We aim to contain costs within sales growth and are implementing cost containment initiatives for H2.

Q: How is foot and mouth disease impacting your Foods business? A: Roy Bagattini, CEO: While availability hasn't been affected due to our supplier arrangements, pricing in our core meat business is up 30%, impacting volumes. We're working with the government to address this issue.

Q: Why are you expanding in Africa despite currency volatility and other retailers closing stores? A: Roy Bagattini, CEO: Our African markets are established and profitable, with a strong brand presence. We focus on markets we know well and see significant growth potential, despite currency challenges.

Q: You've guided to removing AUD 30 million of annualized cost from CRG. Why hasn't this been achieved? A: Zaid Manjra, CFO: We've achieved significant cost savings, with further savings expected over the next 12 months. The costs are flat year-on-year, with additional marketing investments to drive sales.

Q: How do recent events in the Middle East impact your business? A: Roy Bagattini, CEO: Our Foods business is largely locally sourced, minimizing direct impact. However, higher energy costs could affect food inflation. In FBH, we may see increased carrier costs and delivery delays.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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