Woolworths feels the pain

Woolworths expects its earnings for the first half of its 2026 financial year to drop significantly, due to a property sale in the prior financial year.

This is despite a good performance in Woolworths’s home market, South Africa, and a particularly strong contribution from its food business.

In contrast, Woolworths’ Australia and New Zealand operations, housed in the Country Road Group, have struggled significantly over the past few years, with turnaround plans currently being implemented. 

On Thursday, 29 January, Woolworths released a trading update outlining its performance in the 26 weeks ended 28 December 2025.

This update revealed strong turnover and concession sales growth of 5.4%, driven largely by Woolworths’ South African food business.

The retailer’s South African division delivered above-market turnover and concession sales growth of 6.8%,

Within this division, the Food business saw sales growth of 7.0% and 5.2% on a comparable-store basis.

Woolworths reported consistent month-on-month market share gains and positive underlying volume growth for this segment.

In addition, the retailer said its on-demand delivery service, Woolies Dash, showed strong growth, with revenue up 23.0% and the online channel now contributing 7.2% to South African Food sales.

In South Africa, Woolworths’ Fashion, Beauty and Home (FBH) turnover and concession sales increased by 6.2% and by 6.4% on a comparable-store basis.

This strong contribution comes as Woolworths is looking to grow its market share in the FBH space, with its strategy currently focused on improved product availability and optimising this division’s footprint.

The retailer’s Beauty and Home businesses, in particular, delivered stronger growth of 8.9% and 14.0%, respectively. 

However, this strong growth in the retailer’s South African businesses was dragged down by the Country Road Group’s lacklustre performance. 

Woolworths explained that, while trading conditions in Australia and New Zealand appear to be gradually improving, the retail sector remains challenging and highly promotionally driven.

Therefore, the Country Road Group’s sales increased by a far more muted 2.3% and by 2.5% on a comparable-store basis. 

Positively, the retailer said the Country Road, Witchery and Politix brands traded ahead of the prior period.

These brands benefited from the retailer’s efforts to turn its Australian operations around, which involved repositioning the brand portfolio and restructuring its operating model.

While these efforts appear to be bearing fruit, Woolworths said it expects its earnings for the 26-week period to decline significantly compared to the prior year.

The retailer’s earnings per share are expected to decline by between 35% and 30%.

However, the company explained that this is because the prior period included the profit from the sale of its Bourke Street property, which resulted in a higher comparative base. 

However, this profit was adjusted for in the retailer’s headline earnings per share, which are expected to rise by between 7% and 12% compared to the prior year.

Woolworths’ interim results for the first 26 weeks of its 2026 financial year are expected to be released on or about Wednesday, 4 March 2026.

Headline image courtesy of Quintin Coetzee.