Woolworths posts $1.14bn profit surge, credits customer volume over price hikes

Woolworths walked into Wednesday's earnings call with a story its investors wanted to hear: the supermarket giant had grown its way to a $1.14 billion profit, up $175 million from the year before, without resorting to the price hikes that have made Australian grocers unpopular. The company's market value jumped $2 billion in response, briefly touching $50 billion—its highest point since 2021.

The numbers told a particular tale. Sales in the Australian supermarkets division climbed 4.6%, pushing revenue from $51.49 billion to $53.85 billion. Profit margins expanded from 5.3% to 5.5%. Pre-tax earnings rose $232 million to exceed $2.95 billion. Online sales accelerated 15.9% across the company as the retailer rolled out more in-store pickup and on-demand options. It was, on paper, a clean story of expansion.

CEO Amanda Bardwell framed it that way in her remarks to reporters. The margin gains, she said, came not from pushing prices higher but from pulling more customers through the doors and getting them to buy more. Shoppers had shifted into what she called "a new reality of entrenched value seeking"—cost-of-living pressures had stopped being temporary and become structural. Woolworths had simply positioned itself to capture that behavior. This mattered because Woolworths and Coles had both faced sustained criticism for widening margins during a period of high inflation, effectively passing costs to shoppers while suppliers absorbed the squeeze. Inflation itself had run 3.8% in the year to June.

The real engine of growth, though, was something simpler and more playful: plastic Disney characters. The Ooshies campaign gave shoppers a blind bag containing a collectible figurine for every $30 spent. It was a promotion designed to feel like a game, and it worked. In the eight weeks since early July, supermarket sales had accelerated to 7.6% above the prior year. Ooshies alone accounted for up to 2% of that growth—a boost worth roughly $120 million, assuming monthly supermarket sales averaged around $4 billion. The campaign ran from mid-July to mid-August and proved potent enough to hurt competitor Coles, which reported a 1% rise in net profit to $1.09 billion for the same period.

Bardwell acknowledged that Ooshies had drawn shoppers who wouldn't normally visit Woolworths, but she signaled the company had no plans to make it permanent. "We don't think we need to be running them all the time," she said. The implication was clear: the promotion had done its job, and Woolworths would move on.

The broader picture was more complicated. Big W, Woolworths' department store chain, had returned to profit with pre-tax earnings of $64 million, reversing a $33 million loss from the previous year. But even with Ooshies in the mix, Big W had seen sales decline in the last eight weeks, a sign that the collectibles campaign couldn't overcome the weight of household cost pressures, particularly among budget-conscious customers. Woolworths attributed the weakness to "ongoing cost-of-living pressures on households, particularly budget customers and weaker trade in the Everyday business."

There was one more thread in the results: theft and stockloss. Woolworths reported that shrinkage—the retail term for inventory lost to theft and other causes—had declined in 2026, though the company was still exploring technology solutions. Bardwell mentioned that Woolworths had recorded 7,000 incidents of violence in a single year and was running a technical test of facial recognition technology in its New Zealand support office, conducted with staff consent. It was a reminder that behind the profit margins and collectible toys lay a harder reality of security concerns and worker safety.

The earnings painted a portrait of a company that had navigated a difficult consumer environment by understanding what shoppers actually wanted: value, convenience, and a bit of fun. Whether that formula would hold as cost-of-living pressures persisted remained an open question.