Woolworths FY26 slides: food strength masks fashion weakness

In South African retail giant Woolworths' FY26 annual results, released on September 2, 2026, a duality emerged as the company grappled with an unfavourable economic landscape. Despite a 4.3% year-on-year increase in turnover and concession sales to R84.5 billion, the presentation highlighted a stark contrast between the thriving Food division and the underperforming Fashion, Beauty and Home segment.

CEO Sam Ngumeni announced a strategic reset, positioning the premium Food business as the core of the group's future and embarking on a deep portfolio review for struggling assets.

The Food division demonstrated commendable growth, delivering a 5.7% increase in turnover to R55.4 billion and maintaining a 24.9% gross profit margin. Adjusted EBIT rose 3.2% to R3.7 billion, while return on capital employed stood at 37.3%, reflecting significant long-term investments in the business. However, the presentation underscored the inconsistent performance of the Fashion, Beauty and Home division, which posted a 4.4% sales growth to R16.1 billion.

Gross profit margin contracted 1.3 percentage points to 46.0% due to excess inventory clearance and price investments, while adjusted EBIT plunged 14.1% to R1.4 billion.

Woolworths Financial Services showcased a solid performance, with underlying profit growing 5.6% to R228 million. Non-interest revenue surged 17.4%, partially offsetting pressure on net interest income. Return on equity improved to 18.7%, bolstered by well-managed costs. Meanwhile, the Australian Country Road Group returned to profitability, benefiting from brand repositioning and a reset operating model.

Despite the challenging consumer credit environment, Woolworths Financial Services delivered another solid result, with a 5.6% growth in the closing book.