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Woolworths Group (ASX: WOW) reported a 20.5% year-on-year decline in half-year underlying net profit after tax (NPAT), reflecting margin compression due to increased discounting and elevated input costs.
For the six months ending January 5, 2025, the company’s underlying NPAT fell to A$739 million, down from A$929 million in the prior corresponding period. The result fell short of the Visible Alpha consensus estimate of A$770 million.
Revenue growth was offset by higher promotional activity as Woolworths responded to intensifying competition and consumer price sensitivity amid persistent cost-of-living pressures. The company’s largest business segment, Australian Food, recorded a 12.8% decline in earnings to A$1.39 billion, driven by higher meat input costs and a shift in customer spending towards discounted specials.
Woolworths declared an interim dividend of 39 Australian cents per share, compared to 47 cents per share in the previous year.
The results highlight the ongoing challenges facing Australia’s leading supermarket chain as it navigates rising costs, competitive pricing pressures, and evolving consumer spending patterns.
