Woolworths warns profit growth to slow as Middle East conflict and higher rates squeeze shoppers
AI Market Summary
Woolworths' outlook signals softening discretionary demand as higher fuel costs, inflation and elevated interest rates constrain consumers, with second-half sales growth slowing and fashion/home margins pressured by discounting and inventory clearance. While food sales were resilient and the ANZ unit returned to profitability, the report underscores how Middle East-driven energy inflation can transmit into weaker retail operating leverage and more promotional pricing.
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Woolworths Holdings expects full-year headline earnings per share to rise 2.5%–7.5%, a marked slowdown from prior years, as the Middle East conflict lifts fuel costs and inflation while higher interest rates curb consumer spending. The group reported full-year sales growth of 4.3%, but growth eased to 3.3% in the second half. Its fashion and home business saw margins pressured by promotions and inventory clearance, while Australia and New Zealand unit Country Road recorded a 0.5% dip in second-half sales, according to Reuters.
