Woolworths Recent Sales Jump, Lifts Final Dividend by 16%

By David Winning

SYDNEY--Woolworths said food sales at its Australian supermarkets have improved in recent weeks as a promotional campaign featuring Disney characters resonated with shoppers, building on a fiscal 2026 result headlined by a 18% rise in statutory net profit.

In an update covering the first eight weeks of fiscal 2027, Woolworths said sales increased by 7.6% in its Australian food unit.

Supermarket owners such as Woolworths are benefiting from elevated inflation feeding through to higher prices of products in their stores, while cost-of-living pressures including higher rents and fuel prices cut into household budgets and prompt consumers to spend less on dining out and more on cooking at home.

However, a squeeze on budgets can also prompt some shoppers to trade down to cheaper products rather than stick with well-known brands. At the same time, Woolworths is facing stronger competition on price from retailers outside the supermarket sector, such as Bunnings, Amazon and Chemist Warehouse.

Woolworths's response has included leaning into the popularity of Disney characters among families with children, offering collectibles known as ooshies when shoppers spent a minimum amount in stores in a period from late July to early August. The successful campaign temporarily dented sales at Coles, its Australian supermarket rival acknowledged on Tuesday.

Woolworths estimated the Disney Ooshies collectibles program added around 1.5-2.0 points of incremental sales growth in the first eight weeks of fiscal 2027.

It also said New Zealand food sales have risen 4.2% in the new fiscal year so far, but Big W total sales fell modestly as cost-of-living pressures took a toll.

"Customers are expected to remain value-focused in the year ahead and we are committed to limiting the impact of rising costs through low and dependable prices," said Chief Executive Amanda Bardwell said.

She added that wage growth is likely to stay elevated by historical standards, partly because of changes to pay for 18 and 19-year-old staff.

Woolworths provided the trading update to investors alongside a net profit of 1.14 billion Australian dollars (US$820 million) for the 12 months through June 28. That was up from A$963 million a year earlier when the company absorbed write-downs tied to its Big W discount department store chain and closure costs of the MyDeal business, among other significant items.

Revenue rose to A$71.54 billion, from A$69.08 billion a year ago, while earnings before interest and tax, or Ebit, totaled A$3.11 billion. Woolworths said annual sales at its W Living unit rose by 1.7%, with Big W returning to profit during the year. Its New Zealand food business deepened a recovery with 2.5% sales growth.

Directors of Woolworths declared a final dividend of 52 Australian cents a share, up 16% from a payout of 45 cents at the corresponding stage of a year earlier.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

August 25, 2026 19:03 ET (23:03 GMT)