Why is Woolworths stock surging today?

Woolworths stock experienced a significant surge of 4.5% to reach A$40.590 following the release of its impressive annual earnings report. The company reported a substantial increase in its net profit after tax before significant items, which rose by 15.4% to A$1.599 billion. Additionally, EBIT before significant items climbed by 12.7% to A$3.105 billion, surpassing analyst consensus estimates by approximately 2%.

This positive outcome was accompanied by a fully franked final dividend of 52 cents per share, marking a 15.6% increase compared to the previous year.

The driving forces behind Woolworths' earnings beat were two key growth engines: Australian Food, where sales grew by 4.6%, with second-half momentum accelerating to 5.7% as the company focused on price investments and store execution; and the W Living division, which transformed from a loss to a A$116 million profit. E-commerce also played a crucial role in the group's operations, contributing meaningfully to the overall performance.

This strong earnings result came just a day after rival Coles had reported its own robust FY2026 numbers, further boosting sentiment within the supermarket sector as investors looked ahead to Woolworths' print. The broader market also provided a supportive backdrop, with the S&P/ASX 200 trading up around 0.56%.