(Alliance News) - Woolworths Group Ltd on Tuesday reported a significant increase in profit for financial year 2025, while profit before significant items fell, prompting the company to slash its dividend after a challenging year.

The Sydney-based retailer said profit for the period attributable to shareholders multiplied to AUD963 million, approximately USD625.5 million, in the financial year ended June 29 from AUD108 million in the previous year, which had an extra week.

Diluted earnings per share rose to 78.4 Australian cents from 8.9 cents.

However, attributable net profit before significant items fell 19% to AUD1.39 billion from AUD1.71 billion. This contrast is explained by the fact that total significant items dropped 74% to AUD422 million from AUD1.60 billion.

Woolworths shares were down 13% at AUD29.05 in Sydney on Wednesday morning.

Chief Executive Officer Amanda Bardwell said: "Despite food inflation stabilising, broader cost-of-living pressures continue to weigh heavily on household budgets leading to value-seeing behaviour in a very competitive retail environment. Our Australian Food business was also materially impacted from extended industrial action leading up to Christmas."

Revenue increased 1.7% to AUD69.08 billion from AUD67.92 billion, while the cost of sales rose 1.8% to AUD50.26 billion from AUD49.37 billion.

Woolworths cut its final dividend by 21% to AUD0.45 from AUD0.57, reducing the total dividend for the year by 42% to AUD0.84 from AUD1.44.

Branch expenses grew 9.1% to AUD12.77 billion from AUD11.71 billion, but administration expenses fell 25% to AUD4.14 billion from AUD5.54 billion.

Furthermore, total equity declined 11% to AUD4.96 billion from AUD5.57 billion.

"In F26 we expect to return to profit growth following a disappointing F25. We will continue to rebuild customer trust through compelling value and retail execution excellence, simplify the way we work and become a more focused, lower-cost retailer with a differentiated Food offer at our core," CEO Bardwell commented.

By Elijah Dale, Alliance News senior reporter Asia-Pacific

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