Woolworths Group has taken a significant hit to its profits in the first half of the 2026 financial year, despite sales rising by more than $1 billion.
Revenue for the six months ending January 4 was $37.1 billion, up from $35.9 billion on the prior comparable period. In-store retail sales contributed $28.6 billion, while online sales contributed $5.3 billion.
But profit for the period fell by 48.5 per cent year on year. The 2026 figure was $381 million, down from $741 million, and included a $492 million decrease in earnings before interest and tax (EBIT).
The group’s divisions, comprising Australian Food, New Zealand Food, Big W, and business-to-business sales (B2B), grew their revenue across the board. Quantium, the group’s investment in AI transformation, and property investments maintained their place as the group’s second-most costly division behind Australian Food.
After ending its contract with Endeavour Group for warehouse operations at the Melbourne Liquor Distribution Centre, the group said it incurred $61 million of one-off closure costs during the process. The majority of the money was attributed to redundancy costs.
Woolworths accrued heavy costs through the settlement of a variety of pay disputes. By January 4, the group said it had completed $487 million in payments to salaried team members who, as revealed in October 2019, had not been paid in full compliance with the Fair Work Act. The payments were the result of a probe commenced by the Fair Work Ombudsman in 2021. Proceedings were heard in 2023 alongside a class action lawsuit.
Woolworths Group has a remaining provision of $786 million to settle the disputes.
The group also has an outstanding provision of $50 million for hourly-paid staff. It comes after $191 million had been paid to address payment shortfalls to such staff.
“As at the date of this report, the group’s estimate remains subject to ongoing regulatory engagement and the resolution of all legal proceedings,” Woolworths told the ASX.
“Any changes to the provision would be accounted for as a change in accounting estimate within the relevant period.”
The group added that the pending investigations by the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) over pricing and supplier agreements could affect future liabilities. However, Woolworths maintains that it is defending itself against the allegations.
