Shares in Woolworths have had their best day on the share market on record, as earnings for the first half of the financial year impressed investors.
Woolworths shares rallied 13 per cent on Wednesday to $35.63, beating its previous biggest one-day gain posted in October 1997.
The supermarket giant’s net profit fell 49 per cent to $354 million, largely due to extra money set aside to remediate underpaid staff members, after a Federal Court ruling last year.
Excluding the $485 million charge, net profit was up 16 per cent to $859 million, which came in ahead of analysts’ expectations.
Sales in the Australian food division were up 3.6 per cent to $27.6 million.
“Sales momentum improved in [the second quarter] with strong eCommerce growth and improved in-store item trends,” Woolworths Group chief executive Amanda Bardwell said.
“All customer metrics have improved, trading momentum is stronger and we are seeing market share stabilise.”
The supermarket added more than 350 new products to its “lower shelf price” range in the half-year, taking the total to more than 800 products.
The retailer’s “W living” division, including Big W and Petstock, saw sales up 2.7 per cent in the six-month period, with earnings more than doubling.
“The increase reflects a more profitable half for Big W driven by an improved clothing performance, strong Petstock growth and a reduction in losses attributable to [Woolworths marketplace] including the closure of MyDeal in the half,” Ms Bardwell said in the ASX release.
Woolworths shareholders will receive an interim dividend of 45 cents per share, up from the same time a year ago.
“Like all businesses, we see increases in terms of wages, electricity, the general running costs of our business overall, but we’ve been very focused on productivity, looking for those opportunities to reduce the costs,” Ms Bardwell told The Business.
“At the same time, we want to be improving the experience our customers have. That’s been our focus in the half.”
The latest result has been better received by the market than the previous result Amanda Bardwell presented in August. (ABC News: John Gunn)
The well-received result comes as a welcome change from the last result Ms Bardwell presented in August, when underlying profit declined, leading to heavy share price falls.
Wednesday’s gain takes the Woolworths share price back where it was after the fall last August.
“We anticipate that a turnaround at the Australia-based supermarket operator will gather momentum through 2026, underpinned by competitive pricing, improved product availability, and a focus on productivity and cost control,” analysts at S&P Global Ratings said.
Food sales up at start of new year
For the first seven weeks of this year, Australian food sales rose 5.8 per cent.
Analysts at UBS described the sales growth as “very strong” for the start of 2026.
“Trading in the [current quarter] to date has been strong in Australian food; however, customers continued to be value-focused, shopping multiple retailers in a highly competitive environment,” Ms Bardwell said.
For the first seven weeks of this year, Australian food sales rose 5.8 per cent. (ABC: Xanthe Gregory)
A Woolworths customer survey from January found 77 per cent of shoppers said price was their top priority when doing their main grocery shop.
As resurgent inflation puts fresh cost-of-living pressure on Australians, food and non-alcoholic beverages were the second-biggest contributor to annual inflation in January.
“What we’ve delivered in the result is eight consecutive quarters of average selling prices reducing,” Ms Bardwell said in her interview with ABC News.
“When we look at individual products and categories, of course there are examples where commodities will increase.
“So meat pricing is an example of that right now, where meat and lamb pricing has increased, and Woolworths takes every opportunity to manage those shelf prices as much as is possible.
“You’ll also see that in the fruit and vegetable categories — some years, as is the case at the moment, we’ve seen really abundant supply of things like avocadoes, so the average selling prices are low, and then there will be season where weather has impacted particular crops.”
The sales growth figures in the half-year and at the start of 2026 are in comparison to the same period a year ago, which saw the supermarket chain hurt by industrial action, however.
Major rival Coles will release its financial results this Friday, as its court battle with the competition regulator enters closing arguments.
Woolworths will face the Federal Court in April, defending similar allegations of misrepresenting discounts brought by the ACCC.
