Woolworths Holdings expects earnings for the year to end-June to fall as much as 27%, largely due to the underperformance of its Australian Country Road Group (CRG) and the effect of non-cash impairments.
The retailer said in a trading statement on Thursday that headline earnings per share (HEPS) — a key profit measure that strips out certain one-off items — were expected to decline between 22% and 27% compared with the prior comparable 52-week period. That translates to between 257.2c and 274.8c per share, down from 352.3c previously.
The group said the results for the 52 weeks ended June 29 were not directly comparable to those of the 53 weeks ended June 30 2024, due to an additional week of trade in the prior period.
Compared with the previous year’s 53 weeks, HEPS were expected to be 24%-29% lower.
The weak performance is mainly attributed to the CRG business, which has been undergoing a significant restructure following its separation from David Jones. Sales at CRG came under pressure from low footfall, discounting and high import costs, especially in the second half of the year. Those pressures, combined with a non-cash impairment charge of R917m against underperforming brands, weighed heavily on the group’s overall earnings.
In contrast, the SA operations delivered strong growth. Woolworths Food outperformed the market, supported by volume growth and an increase in customer visits. Its Fashion, Beauty and Home business also recovered well in the second half, with online sales contributing meaningfully to overall performance.
Group turnover and concession sales rose over the period, reflecting resilience in the core local business despite tough economic conditions. However, this was not enough to offset the drag from Australia.
Woolworths will release its full-year results on September 3.
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