Woolworths Shares Surge as First-Half Profit Beats Forecasts and Full-Year Guidance Raised

Woolworths Group has reported forecast-beating first-half profit, sending its shares soaring and marking a significant turnaround for Australia’s largest supermarket chain. The strong earnings result comes as cost-conscious shoppers responded positively to price cuts and promotional campaigns, easing concerns that high grocery prices were driving customers away during the ongoing cost-of-living crisis.

For the 27-week period ended January 4, Woolworths posted a 16% rise in underlying net profit to A$859 million, surpassing the Visible Alpha consensus estimate of A$813.5 million. The underlying figure excludes one-off impacts, including industrial action and costs related to reimbursing employees affected by an underpayment claim. The earnings beat highlights the success of Woolworths’ strategy to reduce operating costs and sharpen pricing across its stores.

Australian food sales, the company’s largest revenue segment, increased 3.6% in the July-to-December period, with momentum accelerating into the second half. In the first seven weeks of the new half, food sales climbed 5.8%, well ahead of the 3.4% growth forecast by analysts. Woolworths now expects full-year earnings growth to land near the top end of its previously guided “mid-to-high single digits” range.

CEO Amanda Bardwell described the environment as “very promotionally intense,” noting that customers are seeking both value and consistency in grocery pricing. The retailer’s renewed focus on competitive pricing appears to be strengthening its position in Australia’s highly concentrated supermarket sector, where Woolworths and Coles together control roughly two-thirds of the grocery market.

Investors reacted strongly, pushing Woolworths shares up more than 11%, putting them on track for their largest intraday gain since 1997. Analysts at Ord Minnett suggested the upgraded guidance could still prove conservative given recent sales trends. Meanwhile, market attention is turning to Coles’ upcoming results, which are expected to provide further insight into the competitive dynamics shaping Australia’s supermarket industry.

Woolworths also declared an interim dividend of 45 Australian cents per share, up from 39 cents a year earlier, reinforcing confidence in its financial outlook and long-term growth strategy.