Woolworths Holdings increased full-year turnover by 4.2% to R82.8 billion, supported by its South African Food business and strong growth in on-demand sales, despite weaker consumer demand in the second half.
Trading momentum in Woolworths South Africa moderated to 4.1% in the second half, with particular weakness in the fourth quarter as softer consumer demand and trading disruptions affected performance.
The company said the impact was more pronounced in its Fashion, Beauty and Home division.
South African Food earnings before interest and tax rose 3.2% to R3.7bn, while EBITDA (earnings before interest, tax, depreciation and amortisation) increased 6.1% to R5bn.
Revenue from Woolworths’ on-demand service rose 19.6% during the period, with online sales contributing 7.3% of South African Food revenue.
“Following a good first-half result, the second half of the financial year presented a more challenging operating environment, with the war in the Middle East driving fuel prices and inflation higher, dampening consumer confidence and demand, and increasing operating costs,” Woolworths said on Wednesday.
The company said higher interest rates in South Africa and Australia resulted in consumers prioritising promotional offerings and essential purchases. Woolworths consequently focused on working-capital allocation, cash generation and cost control.
“This was a tough year across our markets, with heightened economic pressure and weaker consumer demand. While our results reflect the resilience of our portfolio and the strength of Woolworths Food, it is not where we want to be,” said group CEO Sam Ngumeni, who succeeded Roy Bagattini on 1 June 2026.
The apparel retail sector in Australia and New Zealand had begun to stabilise in the first half, but rising interest rates affected performance in the second half. Consumer sentiment, footfall and spending then came under pressure, increasing retailers’ reliance on promotions to reduce excess inventory.
Country Road Group reported marginal sales growth for the year, although performance declined in the second half.
Woolworths declared a final cash dividend of 81.0 cents per share for the year ended 28 June, compared with 64.8 cents a year earlier. This took the total dividend for the year to 199.0 cents, up 5.9% from the previous year.
Woolworths shares were 1.95% lower at R41.82 at midday on Wednesday on the JSE.
Adjusted group EBITDA increased 2.8% to R8.9bn. Earnings per share were affected by non-cash impairments recognised in both periods, as well as the prior period’s profit on the sale of the Bourke Street property and rental income from that property.
Adjusted group headline earnings per share rose 3.7% to R3.14. Woolworths said headline earnings per share reflected costs related to one-off restructuring initiatives, acquisition-related transaction costs and unrealised foreign-exchange losses during the period, compared with foreign-exchange gains in the prior period.
Net borrowings stood at R5.9bn, compared with R5.6bn a year earlier. The company said this reflected lower debt levels in South Africa, while its Australian subsidiaries had a net cash position of A$93.5 million.
THE NATIONAL