Woolworths Group Ltd Shares Slump After Earnings Miss

Highlights:

• Woolworths Group Limited (ASX: WOW) dropped 6.2% to $27.37, ranking among the worst performers on the ASX today.
• The decline followed the release of its FY25 results, which showed weaker-than-expected earnings amid higher operating costs.
• Market sentiment turned negative, as investors reacted to margin pressures and a softer outlook for the supermarket giant.

Shares Hit Double-Digit Losses

Woolworths Group Ltd (ASX: WOW) is under heavy selling pressure today following the release of its full-year results for FY 2025. Shares in the supermarket giant closed yesterday at $33.42, but plunged to as low as $29.40 in morning trade. At the time of writing, Woolworths stock is trading at $29.97, down 10.3%, compared to the broader S&P/ASX 200 Index (ASX: XJO), which is up 0.2%.

Strong Sales, Weak Profits

Despite recording a 3.6% year-on-year increase in sales to $69.1 billion, Woolworths’ profitability took a hit. Online sales were a standout, rising 17.1% to $9.1 billion, reflecting the growing shift to digital grocery shopping. However, gross margins slipped to 27.2%, while operating costs increased to 23.3% of sales, squeezing earnings. The real blow came from a 12.6% decline in EBIT to $2.75 billion and a 17.1% fall in net profit after tax (NPAT) to $1.39 billion. Investors were also disappointed with the reduced dividend payout, with management declaring a final fully franked dividend of 45 cents per share, down 21.1% from last year.

Management Outlook

CEO Amanda Bardwell acknowledged the challenges, noting: “After a highly disrupted first half, we have taken action to reposition the group for long-term sustainable growth.” She highlighted investments in lowering shelf prices, boosting specials, and absorbing cost increases to support customers. Looking ahead, Woolworths expects a return to profit growth in FY 2026, supported by stronger performance in Australian Food, a recovery in New Zealand Food, and BIG W’s path back to profitability. Still, with shares now down 15.5% over the past year (excluding dividends), today’s sharp drop underscores investor concerns over Woolworths’ near-term earnings pressure.

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