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JIMMY MOYAHA: The time was 7:05 this morning when Woolworths Holdings Limited released their audited group results for the 52 weeks ended 29th June 2025. Some of the standout numbers there: Revenues increasing to just north of R81 billion. Profits unfortunately came down to R3 billion. From a bottom-line perspective, headline earnings per share and basic earnings per share came down as well, as a result of some moving parts throughout the year.
I’m joined on the line by the Group Chief Executive Officer of the Woolworths Group, Roy Bagattini, to take a look at this and see what we make of the performance. Roy, lovely to have you on the show. Thanks so much for taking the time.
Let’s start with an overview of the numbers – your initial thoughts and reflections on the year that was, understanding that of course you had to contend with a lot of moving parts throughout this financial year, and that would have had an impact on some of the line items that we’ll get into in a sec.
ROY BAGATTINI: Yes. Thank you, Jimmy, for the opportunity. I think the summary would be that our bottom-line result was somewhat disappointing. But when I look at what we’ve accomplished across the different component parts of the group, I’m really pleased that where we find ourselves now the underperformance really was very specific to our Australia business, and we can obviously talk a little bit about that.
But our South African businesses in fact did perform pretty well. When you look at our second-half performances, we grew sales by over 10% and our profitability by over 10% too.
So both our fashion, beauty and home business and our foods business delivered the strongest like-for-like sales growth in their respective sectors. So food’s outperforming everyone in the market, and our fashion business outperforming everyone in the market on a like-for-like basis.
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JIMMY MOYAHA: Roy, let’s take a look at the Woolworths Financial Services business. By comparison, that is the baby of the portfolio when compared to the food business and the beauty business – and that came down in size ever so slightly in the last financial year, but still is above the R1.5 billion mark. How are you feeling about the Financial Services business at the moment?
ROY BAGATTINI: In fact it is a relatively smaller part of a part of the group, but a very important one. That business is in fact a joint venture we have with Absa, and it really is a very tightly but very well-run business. It plays a key role for us in sort of offering our customers various financial services, and we’re obviously able to leverage that through various loyalty programmes, linking their credit cards with our Store Cards and then our overall loyalty programme. So a very important component there.
But, as a business, certainly a very good business that has the healthiest sort of book in the sector, and it delivers a very, very interesting sort of return on investments for us.
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JIMMY MOYAHA: Roy, the Country Road Group portfolio arguably makes up the biggest part of the movements throughout the year. That David Jones separation is finally coming through and being wrapped up, but also allowing for you to reconfigure that overall portfolio from a business perspective. How is that portfolio coming along, understanding that a huge part of that business does still sit in the Australian market for you?
ROY BAGATTINI: Yes, it’s a great question and probably one of the pivotal issues for us. We have done quite a significant amount of work in transforming that business over the past year. Post that separation we’ve had to sort of set that business up as a standalone business, and that has obviously come with various challenges.
But the level of transformation has been quite significant. Really an end- to-end sort of reconfiguration of how that business works as The House of Brands. It has five brands within a portfolio, and how it services those brands and gets those brands into the market – we’ve sort of reconfigured that. We’ve done that in record time with a view that we wanted to get that done.
And with that heavy lift behind us now, I think the [Australian] business is very well set to get on track with positive earnings growth going forward.
We’re already seeing improving momentum in that business having done the work. We’ve extracted a lot of cost. We’ve reset the structural economics.
One of the other things that we’ve done is we’ve sold the Bourke Street property [in Melbourne] and we spoke a little about David Jones a second ago. But Bourke Street was the last sort of remnant of the David Jones link that we’ve had. We were able to sell that property for about R2.6 billion and [made] some very significant profit out of that.
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So not all bad news coming out of Australia. That has allowed us to really dial up our approach to buying back shares in our company.
So obviously we feel that we’re in a very good place holistically across the businesses, have great confidence in our own value, and consequently, have communicated the share-buyback programme, which we’ve now commenced.
JIMMY MOYAHA: Roy, you touched on the bottom line taking a knock. I want to get your thoughts around the plan going into the new financial year. Consumer strength is still an obvious concern for any retailer operating in the retail space. How are you looking at the new financial year from an operating expenses point of view – and what are you looking to do to improve that bottom line?
ROY BAGATTINI: It’s a great question. Obviously, for all of our businesses, the macro environment within which they operate has an impact. When you have record levels of whatever – inflation, interest rates, et cetera – as we have had in Australia for some time, and then just continued pressure on disposable income across segments in South Africa, that obviously has an impact.
That’s somewhat out of our control. We can’t do a heck of a lot about that. We really do focus on the things that we feel we can really impact. And so that’s what we’ve been doing, particularly over this last year. So I think the macros are likely to remain tough. The biggest determinant of our outlook is in fact ourselves and what we can do.
It’s a fact that we’ve now fundamentally transformed our apparel businesses. Our food business is on a tear and is, as I mentioned earlier, delivering the best metrics in a segment.
But having transformed the apparel business, I think is the big reset for us. So we no longer talk about turnarounds. We’re now in a position that all businesses are set to deliver sustainable profitable growth. But I don’t think our company’s been in better shape for that.
And so we are really excited about, the next couple of years.
JIMMY MOYAHA: As we wrap up, Roy, perhaps let’s stay with the food business for a moment, particularly zooming in on the pets business. That Absolute Pets acquisition that you and I spoke about the last time we caught up seems to have filtered through into the business quite nicely. How is that playing out from a business perspective, and are you still optimistic about that business unit – or at least about that particular market for the future of your business?
ROY BAGATTINI: It absolutely is a windfall. We’ve continued to exceed the acquisition case that we put forward when we acquired that business, and that business continues to grow very, very strongly.
Within our Woolies business as well, we’ve had a play in pets for some time. In bringing that together with Absolute Pets the synergies between the two businesses have been very, very strong. We think [we’ll have] very, very positive growth coming out of that segment and we see that continuing. It’s a very competitive space.
We’ve had a number of our peers trying to pile in, but I think we do sort of offer something a little different there and are able to differentiate the offer with a combined Woolies and Absolute Pets business.
We also see that customers who shop [in] our pets businesses are typically about 30 times more valuable to us than customers who don’t. So, pets are really a fundamental and very central component of people’s day-to-day existence, and [customers] continue to spend more and more money on keeping them fit and healthy.
They are really the sort of third member of the family – a very important growth category for us and we’re doubling down on it.
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JIMMY MOYAHA: With significant challenges behind them, the Woolworths team believes that the business couldn’t be in a better position to take advantage of some of the changes they have seen over the past financial year, and these changes will hopefully put them in a better space going into the new financial year.
But, for now, we’ll have to leave this conversation. On that note, thank you so much to Roy for those insights and for the time. Roy Bagattini, the group chief executive officer of the Woolworths Group joined us to take a look at the performance in the year that was, and what the year that lies ahead could potentially look like.
Woolworths’s share price over the last year
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