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Woolworths Group Ltd (AU:WOW)
:WOW

Woolworths Group Ltd (WOW) AI Stock Analysis

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AU:WOW

Woolworths Group Ltd

(OTC:WOW)

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Neutral 56 (OpenAI - 4o)
Rating:56Neutral
Price Target:
AU$28.00
â–¼(-5.28% Downside)
Woolworths Group Ltd's overall stock score reflects financial pressures from declining revenues and high leverage, despite improved cash flow. Technical indicators suggest a bearish trend with overbought conditions. The high P/E ratio indicates overvaluation, while the earnings call revealed ongoing challenges and strategic initiatives. These factors collectively suggest caution for potential investors.
Positive Factors
eCommerce Growth
The significant growth in eCommerce sales indicates a strong adaptation to digital retail trends, enhancing market reach and customer convenience, which supports long-term revenue growth.
Everyday Rewards Program
The success of the Everyday Rewards program boosts customer loyalty and repeat purchases, providing a durable competitive advantage and stable revenue stream.
Sustainability Achievements
Sustainability efforts enhance brand reputation and align with consumer values, potentially driving customer preference and long-term profitability.
Negative Factors
EBIT Decline
A decline in EBIT reflects operational challenges and cost pressures, which may hinder profitability and strategic investments if not addressed.
High Leverage
Significant leverage increases financial risk and limits flexibility, potentially impacting the company's ability to invest in growth opportunities.
Customer Value Perception
Deteriorating value perception can weaken competitive positioning and reduce market share, affecting long-term revenue growth.

Woolworths Group Ltd (WOW) vs. iShares MSCI Australia ETF (EWA)

Woolworths Group Ltd Business Overview & Revenue Model

Company DescriptionWoolworths Group Ltd (WOW) is one of Australia's largest retail companies, operating primarily in the supermarket and grocery sector. The company operates a diverse portfolio of businesses, including Woolworths Supermarkets, Countdown in New Zealand, and a range of other specialty retail formats. Woolworths is known for its core offerings of fresh food, groceries, and general merchandise, along with services such as online shopping and home delivery. The company aims to deliver quality products and exceptional customer service, making it a leading choice for consumers in the region.
How the Company Makes MoneyWoolworths Group generates revenue primarily through the sale of groceries and fresh food products in its supermarkets. The company's revenue model is heavily based on retail sales, with significant income coming from the sale of private label products, which typically have higher margins than branded items. Additionally, Woolworths earns revenue from its online shopping services, where customers can order groceries for delivery or pick-up. The company also benefits from ancillary services, including loyalty programs like the Woolworths Rewards program, which drive customer engagement and repeat purchases. Strategic partnerships with suppliers and investment in technology to enhance supply chain efficiency further contribute to Woolworths' earnings. Seasonal promotions and exclusive product offerings also play a role in boosting sales during peak shopping periods.

Woolworths Group Ltd Earnings Call Summary

Earnings Call Date:Aug 26, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted growth in sales, particularly in eCommerce and Everyday Rewards, alongside achievements in sustainability. However, significant challenges included declines in EBIT, underperformance in BIG W, customer value perception issues, and stock loss concerns. The company is focused on long-term strategic priorities to address these challenges.
Q4-2025 Updates
Positive Updates
Group Sales Increase
Group sales increased by a normalized 3.6% to $69.1 billion, with sales growth in all operating segments. Excluding Petstock, group sales increased 2.9%.
Australian Food eCommerce Growth
Australian food eCommerce sales grew by a normalized 17.4%, driven by on-demand services like MILKRUN and Direct to Boot Now.
Everyday Rewards Program Success
Over 70% of sales in food are captured by Everyday Rewards members. The program has delivered higher advocacy and loyalty, increasing member spending on food.
New Market Expansions
Opened 12 new supermarkets and completed 82 renewals across Australia and New Zealand, with a significant renewal of Hervey Bay post-damage from floods.
Cartology Revenue Growth
Cartology, the media and insights business, saw revenue increase by a normalized 19.5% in F '25 with growth across all channels.
Sustainability Achievements
Delivered an estimated $2.6 billion in societal benefit over 5 years through initiatives addressing hunger, food waste, and decarbonization. Achieved a 6.2% reduction in TRIFR.
Negative Updates
EBIT Decline
Group EBIT declined by a normalized 12.6%, reflecting lower earnings from Australian Food and BIG W segments.
BIG W Losses
BIG W recorded a loss of $63 million in F '25 compared to a loss of $29 million in the prior year, with disappointing financial performance and ongoing challenges.
Challenges in Australian Food
Australian Food EBIT declined 10.5%, with challenges from industrial action, cost inflation, and price investment impacting performance.
Customer Sentiment and Value Perception
Despite improvements in customer scores, the value perception has deteriorated, impacting sales momentum and competitive positioning.
Stock Loss Concerns
A rise in stock loss rates, particularly in the second half, with measures needed to address increased acts of violence and theft.
High Capital Expenditure
Continued high levels of capital expenditure raising concerns about the necessity and efficiency of sustaining CapEx within the business structure.
Company Guidance
In the Woolworths Group FY '25 Full Year Earnings Call, the company reported a 3.6% increase in group sales to $69.1 billion, although group EBIT declined by 12.6% due to various challenges, including industrial action and cost pressures. Excluding Petstock, sales growth was 2.9%. The company cited improving customer scores and a focus on lowering prices as positive signs, despite overall performance falling short of expectations. Woolworths also highlighted strong contributions from eComX, media, rewards, and services. The company invested in lowering shelf prices on 500 items, seeing a 4-point increase in VOC NPS scores. The Everyday Rewards program captured over 70% of food sales, emphasizing its importance in driving customer loyalty. Looking ahead, Woolworths expects mid- to high single-digit EBIT growth in FY '26, with strategic priorities including improving price perception and retail execution, simplifying operations, and expanding complementary businesses.

Woolworths Group Ltd Financial Statement Overview

Summary
Woolworths Group Ltd faces financial pressure with declining revenues and operational challenges. Despite improved cash flow generation, high leverage and low profitability margins pose risks. The company needs to enhance operational efficiency and manage debt levels to strengthen its financial position.
Income Statement
45
Neutral
Woolworths Group Ltd has faced challenges in maintaining revenue growth, with a significant decline of 20.2% in the latest year. The gross profit margin remains stable at around 27%, but the net profit margin is low at 1.39%, indicating limited profitability. The negative EBIT margin suggests operational inefficiencies or extraordinary expenses impacting earnings.
Balance Sheet
50
Neutral
The company has a high debt-to-equity ratio of 3.58, indicating significant leverage which could pose financial risks. However, the return on equity is relatively strong at 19.81%, suggesting effective use of equity to generate profits. The equity ratio is not provided, but the high leverage remains a concern.
Cash Flow
60
Neutral
Woolworths has shown a strong free cash flow growth rate of 61.89%, reflecting improved cash generation. The operating cash flow to net income ratio is 0.37, indicating adequate cash flow relative to net income. However, the free cash flow to net income ratio of 0.44 suggests room for improvement in converting income to free cash flow.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue69.08B69.08B67.92B64.29B60.85B55.73B
Gross Profit17.56B18.82B18.55B17.18B18.04B16.33B
EBITDA5.15B4.57B3.53B5.36B4.51B4.90B
Net Income963.00M963.00M108.00M1.62B1.55B2.07B
Balance Sheet
Total Assets33.83B33.83B33.94B37.18B33.27B39.24B
Cash, Cash Equivalents and Short-Term Investments1.27B1.27B1.30B1.14B1.03B1.01B
Total Debt17.39B17.39B16.72B15.73B16.76B14.89B
Total Liabilities28.87B28.87B28.37B30.61B27.17B37.50B
Stockholders Equity4.86B4.86B5.41B6.42B5.98B1.38B
Cash Flow
Free Cash Flow2.02B2.02B1.81B2.28B1.01B2.25B
Operating Cash Flow4.55B4.55B4.36B4.80B3.43B4.64B
Investing Cash Flow-2.35B-1.93B-2.31B-1.89B-2.51B-2.21B
Financing Cash Flow-2.23B-2.65B-1.92B-2.81B-1.34B-3.04B

Woolworths Group Ltd Technical Analysis

Technical Analysis Sentiment
Positive
Last Price29.56
Price Trends
50DMA
27.85
Positive
100DMA
28.56
Positive
200DMA
29.55
Positive
Market Momentum
MACD
0.44
Negative
RSI
69.45
Neutral
STOCH
70.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:WOW, the sentiment is Positive. The current price of 29.56 is above the 20-day moving average (MA) of 28.81, above the 50-day MA of 27.85, and above the 200-day MA of 29.55, indicating a bullish trend. The MACD of 0.44 indicates Negative momentum. The RSI at 69.45 is Neutral, neither overbought nor oversold. The STOCH value of 70.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:WOW.

Woolworths Group Ltd Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$3.69B13.0117.17%5.54%4.74%6.60%
62
Neutral
$20.33B14.63-3.31%3.23%1.93%-12.26%
62
Neutral
$29.37B27.0928.51%3.17%1.84%-3.62%
56
Neutral
AU$35.75B37.2618.56%2.84%1.70%796.48%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:WOW
Woolworths Group Ltd
29.56
-0.19
-0.63%
AU:COL
Coles Group
21.79
3.66
20.22%
AU:MTS
Metcash Limited
3.26
0.21
6.75%

Woolworths Group Ltd Corporate Events

Woolworths Group Highlights Moorebank Distribution Centers in Investor Presentation
Dec 3, 2025

Woolworths Group Ltd has released a presentation related to a site visit at its Moorebank distribution centers. This visit underscores the company’s commitment to enhancing its distribution capabilities, which is crucial for maintaining its competitive edge in the retail sector. The presentation is part of Woolworths’ ongoing efforts to engage with investors and analysts, highlighting the strategic importance of its logistics operations.

Woolworths Faces Class Action Over Underpayment Disclosures
Dec 1, 2025

Woolworths Group Ltd has acknowledged the commencement of shareholder class action proceedings in the Federal Court of Australia, initiated by Dutton Law Pty Ltd. The legal action pertains to allegations of inadequate disclosures concerning team member underpayments. Woolworths Group has stated that it does not consider these proceedings to be market sensitive and intends to defend against the allegations.

Woolworths Group Updates Director’s Interest Notice
Nov 26, 2025

Woolworths Group Limited announced a change in the director’s interest notice, specifically regarding Amanda Bardwell’s securities holdings. There were no changes in the number of ordinary shares held by Ms. Bardwell or the Jefferson John Family Trust. However, there were updates to her Performance Share Rights and Share Rights, with new allocations under the F26 Woolworths Incentive Share Plan and the F25 Deferred Short Term Incentive Plan. These changes reflect the company’s ongoing commitment to aligning executive incentives with shareholder interests.

Woolworths Group Issues Unquoted Equity Securities for Employee Incentives
Nov 26, 2025

Woolworths Group Limited has announced the issuance of unquoted equity securities under an employee incentive scheme. This includes 2,568,743 performance rights and 1,418,367 share rights, which are subject to transfer restrictions and will not be quoted on the ASX until these restrictions are lifted. This move is part of the company’s strategy to incentivize employees and align their interests with the company’s long-term goals.

Woolworths Group Announces Cessation of Securities Due to Unmet Conditions
Nov 20, 2025

Woolworths Group Limited announced the cessation of certain securities, specifically 425,211 performance rights and 19,558 share rights, due to unmet conditions. This development may affect the company’s capital structure and could have implications for stakeholders, reflecting on the company’s operational adjustments and strategic decisions.

Woolworths Group Announces Director Change
Oct 31, 2025

Woolworths Group Limited announced that Holly Kramer has ceased to be a director as of October 30, 2025. The notice details her relevant interests in securities, including shares held in Bond Street Custodians Limited and under the Woolworths Group Non-Executive Directors Equity Plan. This change in directorship may impact the company’s governance and stakeholder engagement strategies.

Woolworths Group AGM: Key Resolutions and Outcomes
Oct 30, 2025

Woolworths Group Ltd held its Annual General Meeting on October 30, 2025, where all resolutions were decided by poll. Key outcomes included the re-election of directors and the adoption of the remuneration report, while a special resolution to amend the constitution was not carried. These decisions reflect the company’s ongoing governance and strategic direction, impacting its stakeholders and reinforcing its market position.

Woolworths Group Faces Financial Challenges in FY25
Oct 30, 2025

Woolworths Group’s Annual General Meeting highlighted the company’s financial challenges in FY25, with a notable decline in EBIT due to cost-of-living pressures, price reductions, and supply chain disruptions. Despite improved sales in some areas, the overall performance fell short of expectations, prompting the introduction of a new incentive for senior leaders to address immediate priorities and improve future outcomes.

Woolworths Group Reports Modest Q1 Sales Growth Amid Strategic Shifts
Oct 28, 2025

Woolworths Group Ltd reported a 2.7% increase in total first-quarter sales, reaching $18.5 billion, despite performance being below expectations. The company saw growth in Australian Food sales by 2.1% and a significant 13.2% rise in eCommerce sales, driven by customer demand for convenience. New Zealand Food sales also showed improvement, with a 3.2% increase. Woolworths is optimistic about the upcoming festive season, with plans to enhance customer experience and product offerings, although it acknowledges that the full impact of its strategic actions will take time to materialize.

Woolworths Group Appoints New Non-Executive Director
Oct 3, 2025

Woolworths Group Limited has announced the appointment of Ken Meyer as a non-executive director, effective from October 1, 2025. This strategic addition to the board is expected to enhance the company’s governance and potentially influence its strategic direction, reflecting a commitment to strengthening leadership and oversight.

Woolworths Group to Host Hybrid AGM in 2025
Sep 26, 2025

Woolworths Group Ltd has announced that its 2025 Annual General Meeting (AGM) will be held as a hybrid event on 30 October 2025. The meeting will take place at their support office in Bella Vista, New South Wales, and will also be accessible online, allowing shareholders to participate remotely. This approach reflects the company’s commitment to engaging with its stakeholders and adapting to modern communication methods.

Woolworths Group Updates Dividend Reinvestment Plan Pricing
Sep 19, 2025

Woolworths Group Limited has announced an update regarding its dividend distribution, specifically an amendment to the Dividend Reinvestment Plan (DRP) price. This update pertains to the six-month financial period ending on June 29, 2025, and reflects changes from a previous announcement made on August 27, 2025. The announcement is significant for stakeholders as it may impact the company’s financial strategies and shareholder returns.

Woolworths Group Updates Director’s Interest Notice
Sep 15, 2025

Woolworths Group Limited has announced a change in the director’s interest notice, specifically concerning Tracey Fellows. The announcement details the acquisition of 361 NED Share Rights under the NED Equity Plan, valued at $9,989.66. This change reflects the company’s ongoing commitment to aligning director interests with shareholder value, potentially impacting the company’s governance and stakeholder relations positively.

Woolworths Group Seeks Quotation for New Securities
Sep 15, 2025

Woolworths Group Limited has announced the application for quotation of ordinary securities issued under the NED Equity Plan to satisfy future vesting of share rights. This move, involving 1,987 ordinary fully paid securities, is part of the company’s strategic financial management, potentially impacting its market operations and investor relations.

Woolworths Issues Unquoted Equity Securities for Employee Incentives
Sep 15, 2025

Woolworths Group Limited announced the issuance of unquoted equity securities under an employee incentive scheme, including 10,176 performance rights and 98,502 share rights. These securities are subject to transfer restrictions and are not listed on the ASX until these restrictions are lifted, indicating a strategic move to retain and motivate employees while potentially impacting the company’s equity structure.

Woolworths Group Affirms Earnings in Line with Market Expectations
Sep 9, 2025

Woolworths Group Limited has responded to an inquiry from the Australian Securities Exchange regarding its financial performance for the year ended 29 June 2025. The company reported that its statutory and underlying earnings did not materially differ from market expectations, with less than a 1% variance in key financial measures compared to analyst forecasts. Woolworths highlighted that its statutory earnings were not significantly relied upon by analysts due to non-cash and non-recurring items, such as impairments and restructuring costs, which were previously communicated to the market. The company maintained that its underlying earnings aligned with market expectations, reinforcing its stable financial position.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 30, 2025