Top Australian grocer Woolworths jumps as value-conscious shoppers drive sales (updated)

Woolworths

26/08/2026 24:20

Co reports annual underlying net profit of A$1.60 billion
Co expects customers to remain value-focused in year ahead  
Declares final dividend of 52 Au cents per share
Recasts paragraph 1, updates shares and adds analyst comment
By Shivangi  Lahiri and Kumar Tanishk
Aug 26 (Reuters) - Woolworths WOW.AX flagged a strong start to the new fiscal year after beating annual profit expectations on Wednesday, sending its shares to a five-year high, even as it warned that tight budgets would keep shoppers focused on bargains.
Higher living costs have pushed Australian consumers towards discounts, specials and cheaper private-label goods, a trend Woolworths has leaned on to defend traffic and sales volumes.
Australia's largest supermarket chain reported underlying net profit of A$1.60 billion ($1.15 billion) for the year ended June 28, up from A$1.39 billion a year earlier and ahead of the A$1.55 billion Visible Alpha consensus, as shoppers bought more lower-priced and own-brand items. 
That also topped rival Coles' COL.AX annual underlying net profit of A$1.26 billion reported a day earlier.
"We expected a recovery and a strong start to FY27, and management delivered," said Cameron Curko, chief investment officer at Pitcher Partners.
The Australian Food business traded ahead of expectations, while the non-food retail segment made up a large share of the group's earnings growth, Curko said.
Shares of the grocer rose as much as 6% to A$41.19, their highest since September 2021, and were the top gainer in a subdued broader market .AXJO.
Woolworths, which accounts for more than a third of Australia's grocery sales, lifted its final dividend to 52 Australian cents a share from 45 cents a year earlier.
Sales at its key Australian Food division rose 4.6% to A$53.85 billion, helped by higher volumes and better promotional offers.
The momentum has continued into the new financial year, with Australian Food sales up 7.6% in the first eight weeks of fiscal 2027. 
That was well ahead of the 3.7% growth reported by Coles' supermarket business and above Visible Alpha's 5.05% rise forecast for the first half.
Woolworths said its Disney DIS.N Ooshies campaign, launched in mid-July, helped strengthen sales at the start of fiscal 2027 and was estimated to have contributed about 1.5 to 2 percentage points of incremental sales growth.
Curko cautioned that the boost from the Ooshies collectables push was unlikely to be repeated, noting that such promotions typically lose their effect over time. He pointed, though, to the rising share of online sales as a sign of a lasting shift in how customers shop.
     
($1 = 1.3965 Australian dollars)

 (Reporting by Shivangi Lahiri and Rajasik Mukherjee in Bengaluru; Additional reporting by Kumar Tanishk; Editing by Vijay Kishore, Sherry Jacob-Phillips and Subhranshu Sahu)
 ((shivangi.lahiri@thomsonreuters.com
tanishk.kumar@thomsonreuters.com))