Australia’s largest supermarket chain, Woolworths Group, reported a 19% decline in its full-year underlying profit on Wednesday, alongside a concerningly slow start to the 2026 fiscal year. The company’s underlying net profit after tax fell to A$1.39 billion ($883.73 million) for the year ended June 29, down from A$1.71 billion the previous year. This result was largely in line with analyst expectations but highlighted the significant financial headwinds the retail giant is facing.
The performance was primarily driven by slower-than-expected sales growth in its most important division, Australian Food. For the first eight weeks of the new business year, sales in this division grew by just 2.1%. This figure not only fell short of analyst forecasts but also lagged behind its main competitor. Smaller peer Coles reported a much stronger 4.9% growth in its supermarkets division for the same period, putting pressure on Woolworths’ market position.
Reflecting the tougher financial year, the company’s board declared a lower final dividend of 45 Australian cents per share, down from 57 cents per share a year earlier. As the seller of more than one-third of the nation’s groceries, Woolworths’ performance is a key indicator of consumer spending health and competitive dynamics within the Australian retail sector.
The weak sales growth at the start of the new fiscal year suggests the challenges are ongoing. Woolworths’ growth rate of 2.1% is significantly lower than the Visible Alpha consensus forecast of 4.1% growth for the first six months, indicating that the company may continue to face an uphill battle in regaining its sales momentum against its rivals.
