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Woolworths Group Ltd (AU:WOW)
ASX:WOW
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Woolworths Group Ltd (WOW) AI Stock Analysis

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AU:WOW

Woolworths Group Ltd

(Sydney:WOW)

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Neutral 49 (OpenAI - 4o)
Rating:49Neutral
Price Target:
AU$28.00
â–²(6.10% Upside)
Woolworths Group Ltd's overall stock score reflects significant financial and operational challenges, including high leverage and declining profitability. Technical indicators suggest bearish momentum, and the high P/E ratio indicates potential overvaluation. While the earnings call showed some positive strategic initiatives, the decline in EBIT and customer perception issues weigh heavily on the score.
Positive Factors
Negative Factors

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

Woolworths Group Ltd Business Overview & Revenue Model

Company DescriptionWoolworths Group Limited operates retail stores. It operates through Australian Food, Australian B2B, New Zealand Food, BIG W, and Other segments. The Australian Food segment procures and resells food and related products, and provides services to customers in Australia. It operates 1,087 Woolworths supermarkets and Metro Food stores. The Australian B2B segment engages in procurement and distribution of food and related products for resale to other businesses, as well as provision of supply chain services to business customers in Australia. The New Zealand Food segment is involved in the procurement and resale of food and drinks, and provides services to retail customers in New Zealand. This segment operates 190 countdown supermarkets. The BIG W segment procures and resells discount general merchandise products to customers in Australia. This segment operates 176 BIG W stores. Woolworths Group Limited also engages in the wholesale operation. The company was formerly known as Woolworths Limited and changed its name to Woolworths Group Limited in December 2017. Woolworths Group Limited was incorporated in 1924 and is based in Bella Vista, Australia.
How the Company Makes MoneyWoolworths Group Ltd generates revenue primarily through the sale of groceries, fresh produce, and general merchandise in its supermarkets and grocery stores across Australia and New Zealand. The company's key revenue streams include retail sales from its network of Woolworths and Countdown supermarkets, as well as from its discount department store chain, Big W. In the liquor segment, Woolworths earns income through its Dan Murphy's and BWS stores. Additionally, the company's hotels and gaming operations, managed under the ALH Group, contribute to its earnings via food, beverage, and gaming machine revenues. Woolworths also benefits from its customer loyalty program, Everyday Rewards, which drives repeat sales and customer engagement. Strategic partnerships with suppliers and an extensive supply chain network further enhance its profitability.

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
EBITDA5.15B4.57B3.53B5.36B5.05B5.43B
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
Negative
Last Price26.39
Price Trends
50DMA
29.19
Negative
100DMA
30.13
Negative
200DMA
29.94
Negative
Market Momentum
MACD
-0.73
Negative
RSI
27.78
Positive
STOCH
18.99
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:WOW, the sentiment is Negative. The current price of 26.39 is below the 20-day moving average (MA) of 27.22, below the 50-day MA of 29.19, and below the 200-day MA of 29.94, indicating a bearish trend. The MACD of -0.73 indicates Negative momentum. The RSI at 27.78 is Positive, neither overbought nor oversold. The STOCH value of 18.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
69
Neutral
$31.23B28.6828.51%2.97%1.84%-3.62%
62
Neutral
$20.33B14.63-3.31%3.23%1.93%-12.26%
61
Neutral
$4.11B14.5818.20%4.77%8.86%0.23%
49
Neutral
$32.10B33.6618.56%3.18%1.70%796.48%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:WOW
Woolworths Group Ltd
26.39
-5.56
-17.41%
AU:COL
Coles Group
23.27
6.02
34.88%
AU:MTS
Metcash Limited
3.74
0.38
11.38%

Woolworths Group Ltd Corporate Events

Woolworths Group to Close MyDeal and Focus on Marketplace Consolidation
Jun 26, 2025

Woolworths Group Ltd has announced the closure of its MyDeal customer website by 30 September, as part of a strategic move to consolidate its marketplace offerings into BIG W Market and Everyday Market. This decision aims to reduce operating losses and capitalize on the strong traffic growth of its existing digital platforms. The closure is expected to incur cash costs of $90 – $100 million and non-cash costs related to asset impairment, with further updates to be provided in August.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Seeks Quotation for New Securities
Jun 17, 2025

Woolworths Group Limited has announced the application for the quotation of ordinary securities to satisfy future vesting of share rights under the NED Equity Plan. This move is part of their strategic financial operations, potentially impacting their market positioning and providing value to stakeholders.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Issues Unquoted Equity Securities for Employee Incentive
Jun 17, 2025

Woolworths Group Limited announced the issuance of unquoted equity securities under an employee incentive scheme. This move involves the allocation of performance rights and share rights, which are subject to transfer restrictions until certain conditions are met. This initiative is likely aimed at aligning employee interests with company performance, potentially enhancing workforce motivation and retention.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Announces Cessation of Securities Due to Unmet Conditions
Jun 12, 2025

Woolworths Group Limited announced the cessation of certain securities, specifically 264,413 performance rights and 38,446 share rights, due to unmet conditions. This announcement may impact the company’s capital structure and could have implications for stakeholders, reflecting potential challenges in meeting performance criteria.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Director Increases Shareholding
May 13, 2025

Woolworths Group Limited has announced a change in the director’s interest, with Maxine Brenner acquiring an additional 470 ordinary shares through her superannuation fund, bringing her total to 8,935 shares. This acquisition reflects a strategic move within the company’s leadership, potentially impacting shareholder confidence and market perception.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Director Increases Shareholding
May 7, 2025

Woolworths Group Limited announced a change in the director’s interest notice, revealing that Director Maxine Brenner has increased her indirect interest in the company’s ordinary shares. The transaction involved the acquisition of 625 shares, bringing her total to 8,465 shares, which were purchased on the market for $20,401.05. This change reflects a strategic move in the director’s investment portfolio, potentially indicating confidence in the company’s future performance.

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: Sep 03, 2025