Full Year 2026 Woolworths Group Ltd Earnings Call

August 26, 2026

Speaker #1: Thank you for standing by, and welcome to the Woolworths Group FY26 full-year earnings announcement. All participants are in listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the Woolworths Group FY26 full year earnings announcement. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Amanda Bardwell, Managing Director and CEO of Woolworths Group. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Amanda Bardwell, Managing Director and CEO of Woolworths Group.

Speaker #1: Please go ahead.

Speaker #2: Good morning, everyone. Thank you for joining us today for Woolworths Group's full-year results for the 2026 financial year. I'd like to start by acknowledging the traditional custodians of the land on which we meet today, Dharug Country, and I'd like to pay my respects to Elders past and present.

Amanda Bardwell: Good morning, everyone. Thank you for joining us today for Woolworths Group's full year results for the 2026 financial year. I would like to start by acknowledging the traditional custodians of the land on which we meet today, Gadigal country, and I would like to pay my respects to elders past and present. Joining me this morning are Stephen Harrison, our Chief Financial Officer, Annette Karantoni, Managing Director of Woolworths Retail, Amitabh Mall, Managing Director of Group eComX, Sally Copland, Managing Director of Woolworths New Zealand, and Dan Hake, Managing Director of BIG W. I will start with an overview of the group's performance in the year and share the progress we have made against our strategic priorities. Steve will then cover our financial performance before I conclude with an update on current trading and the outlook for F27.

Speaker #2: Joining me this morning are Stephen Harrison, our Chief Financial Officer; Annette Carantoni, Managing Director of Woolworths Retail; Amitabh Moore, Managing Director of Group EcomX; Sally Copeland, Managing Director of Woolworths New Zealand; and Dan Haig, Managing Director of BIG W.

Speaker #2: I will start with an overview of the Group's performance in the year and share the progress we've made against our strategic priorities. Steve will then cover our financial performance before I conclude with an update on current trading and the outlook for FY27.

Speaker #2: We made good progress on our strategy to be the first choice for customers during FY26, and this has led to solid improvement in performance.

Amanda Bardwell: We made good progress on our strategy to be the first choice for customers during F26, and this has led to solid improvement in performance. We focused on rebuilding customer trust through investment in value and the customer experience, and by returning to the levels of retail excellence our customers expect of us. This has led to solid item and sales growth, particularly in H2. E-commerce remains strong with an acceleration in H2, and our complimentary businesses and services made a significant contribution to growth during the period. We remained focused on restoring a low-cost discipline across the group and delivered our above-store cost savings target of approximately AUD 400 million in the year, as well as solid productivity. This supported a strong reduction in CODB. Turning to our financial performance on slide 5. Group sales in F26 increased by 3.6%, with group EBIT growth before significant items of 12.7%.

Speaker #2: We focused on rebuilding customer trust through investment in value and the customer experience, and by returning to the levels of retail excellence our customers expect of us.

Speaker #2: This has led to solid item and sales growth, particularly in H2. E-commerce remained strong, with an acceleration in H2, and our complementary businesses and services made a significant contribution to growth during the period.

Speaker #2: We remained focused on restoring a low-cost discipline across the Group and delivered our above-store cost savings target of approximately $400 million in the year, as well as solid productivity.

Speaker #2: This supported a strong reduction in CODB. Turning to our financial performance on slide 5, group sales in FY26 increased by 3.6%, with group EBIT growth before significant items of 12.7%.

Speaker #2: All trading segments delivered an improved performance, with our cornerstone Australian food business the most significant contributor. The reported EBIT growth did benefit from cycling the disruption of industrial action in the first half of FY25.

Amanda Bardwell: All trading segments delivered an improved performance with our cornerstone Australian Food business the most significant contributor. The reported EBIT growth did benefit from the cycling, the disruption of industrial action in the first half of F25. Excluding this and supply chain implementation costs, group EBIT would have increased by 8.7% in F26. I said last year that a key priority was to restore trading momentum in Australian Food. During the year, we invested in value, fresh and convenience, and we worked hard to improve our retail execution. The actions we have taken have led to improved trading with Australian Food sales increasing by 4.6% in F26, with growth of 5.7% in H2. Sales growth was driven primarily by item growth, with an increase in customer transactions and items per basket compared to the prior year. Pleasingly, we have seen this solid momentum continue into F27. Turning now to slide 7.

Speaker #2: Excluding this, and supply chain implementation costs, group EBIT would have increased by 8.7% in FY26. I said last year that a key priority was to restore trading momentum in Australian Food.

Speaker #2: During the year, we invested in value, fresh, and convenience, and we worked hard to improve our retail execution. The improved trading, with Australian Food sales increasing by 4.6% in FY26, with growth of 5.7% in H2.

Speaker #2: Sales growth was driven primarily by item growth, with an increase in customer transactions and items per basket compared to the prior year. Pleasingly, we've seen this solid momentum continue into FY27.

Speaker #2: Turning now to slide 7. Persistent inflation, global volatility, and consecutive interest rate rises during the year have continued to put pressure on our customers, with over 40% of customers telling us that they are struggling to make ends meet.

Amanda Bardwell: Consistent inflation, global volatility, and consecutive interest rate rises during the year have continued to put pressure on our customers, with over 40% of customers telling us that they are struggling to make ends meet. Customers remain value-focused, and while customer sentiment has stabilized somewhat over the last few months, value-seeking behaviors, like shopping across multiple retailers, remain elevated. AI is also shaping the way customers shop, with 64% of Australians saying that they have used AI assistance to shop. Turning now to slide 8. Our strategy to be first choice for customers gives us confidence that we can deliver long-term shareholder value. In August last year, we shared our medium-term strategic priorities and we have made good progress on these in F26. I will provide some of these highlights in the next few slides.

Speaker #2: Customers remain value-focused, and while customer sentiment has stabilized somewhat over the last few months, value-seeking behaviors like shopping across multiple retailers remain elevated. AI is also shaping the way customers shop, with 64% of Australians saying that they have used AI assistance to shop.

Speaker #2: Turning now to slide 8. Our strategy to be the first choice for customers gives us confidence that we can deliver long-term shareholder value. In August last year, we shared our medium-term strategic priorities, and we've made good progress on these in FY26.

Speaker #2: I'll provide some of these highlights in the next few slides. I'm confident that the progress on our strategy will provide a strong platform to achieve the Group's financial aspirations and long-term success for customers, team, and shareholders.

Amanda Bardwell: I am confident that the progress on our strategy will provide a strong platform to achieve the Group's financial aspirations and long-term success for customers, team, and shareholders. Turning to slide 9 and value. To rebuild price trust and provide dependable value, we lowered prices for our customers with more items added to Lower Shelf Price, which has led to an improvement in value for money scores. Providing value customers can trust is even more critical in the current environment, and we are committed to doing more to help them. As our price freeze initiative has ended, earlier this week we announced the expansion of Lower Shelf Price, now with more than 1,000 products included in the range, with new additions including mince, chicken, eggs, and cheese, recognizing the importance of these as part of the weekly shop. Turning to slide 10.

Speaker #2: Turning to slide 9. To rebuild price trust and provide dependable value, we lowered prices for our customers, with more items added to lower shelf prices, which has led to an improvement in value-for-money scores.

Speaker #2: Providing value customers can trust is even more critical in the current environment, and we're committed to doing more to help them. As our price freeze initiative has ended, earlier this week we announced the expansion of lower shelf prices, now with more than 1,000 products included in the range, with new additions including mints, chicken, eggs, and cheese, recognizing the importance of these as part of the weekly shop.

Speaker #2: Turning to slide 10, we also provided more value to our customers through the Everyday Rewards program, with investment in personalized value and new and popular Everyday Rewards campaigns, leading to a significant increase in member engagement.

Amanda Bardwell: We also provided more value to our customers through Everyday Rewards program, with investment in personalized value and new and popular Everyday Rewards campaigns leading to a significant increase in member engagement. A real highlight was the significant increase in customers boosting Everyday Rewards offers across the year. Slide 11. The best fresh offer remains critical to our success, and we have delivered improvements in quality, availability, and value during the year. This has helped to deliver fresh sales growth of 7.7% in H2 and fruit and vegetable Voice of Customer, NPS, ended the year 2 points on the prior year. While pleasing, we know we need to do more to deliver the best quality and range in every fresh category. We also worked hard during the year to improve our own brand offer.

Speaker #2: A real highlight was the significant increase in customers boosting Everyday Rewards offers across the year—see slide 11. The best Fresh offer remains critical to our success, and we've delivered improvements in quality, availability, and value during the year.

Speaker #2: This has helped to deliver fresh sales growth of 7.7% in H2, and fruit and vegetable Voice of Customer NPS ended the year 2 points up on the prior year.

Speaker #2: While pleasing, we know we need to do more to deliver the best quality and range in every fresh category. We also worked hard during the year to improve our own-brand offer.

Speaker #2: A highlight in H2 was the transformation of our convenience meals range, which included the launch of 83 new and 60 reformulated ready-made convenience meals, helping to better meet the growing demand for convenience and quality.

Amanda Bardwell: A highlight in H2 was the transformation of our convenience meals range, which included the launch of 83 new and 60 reformulated ready-made convenience meals, helping to better meet the growing demand for convenience and quality. We have previously spoken about the action we are taking to improve our range and value offer in key everyday needs categories like pet and baby. In H2, we relaunched Little Ones nappy range, featuring improved fit and absorbency, and we have seen an 80% repeat purchase rate. While everyday needs sales growth rates improved in H2, growth remains below other areas of the store and we will continue to improve our offer in the year ahead. On slide 13, and the easiest ways to shop. Engagement with Woolworths digital platforms continues to strengthen, with average weekly visits to the app and website increasing 22.9% on the prior year.

Speaker #2: We have previously spoken about the actions we're taking to improve our range and value offer in key everyday needs categories, like pet and baby.

Speaker #2: In H2, we relaunched Little Ones' nappy range, featuring improved fit and absorbency, and we've seen an 80% repeat purchase rate. While everyday needs sales growth rates improved in H2, growth remains below other areas of the store, and we'll continue to improve our offer in the year ahead.

Speaker #2: On slide 13 and the easiest ways to shop, engagement with Woolworths digital platforms continues to strengthen, with average weekly visits to the app and website increasing 22.9% on the prior year.

Speaker #2: We also saw e-commerce orders placed using our app exceed 70% for the first time in Q4. Seamless digital experiences are critical to today's customer.

Amanda Bardwell: We also saw e-commerce orders placed using our app exceed 70% for the first time in Q4. Seamless digital experiences are critical to today's customer. Leveraging agentic AI, Olive, our much-loved digital shopping assistant, has transformed into a personal shopping companion, making the weekly shop easier for customers. While it is still early days, we are already seeing customers using Olive for recipe inspiration, meal planning, and product discovery. I personally have been using Olive to recommend what to cook using what is already in my fridge alongside top-up items from my Delivery Now order. We also recently launched Smart Basket, which helps customers build their online baskets faster through predictive additions based on purchasing habits, which is seeing positive engagement and customer retention rates. E-commerce growth remains strong in F26 and accelerated in H2, reflecting customer investment and network expansion.

Speaker #2: Leveraging agentic AI, Olive, our much-loved digital shopping assistant, has transformed into a personal shopping companion, making the weekly shop easier for customers. While it is still early days, we're already seeing customers use Olive for recipe inspiration, meal planning, and product discovery.

Speaker #2: I personally have been using Olive to recommend what to cook using what's already in my fridge, alongside top-up items from my Delivery Now order.

Speaker #2: We also recently launched Smart Basket, which helps customers build their online baskets faster through predictive additions based on purchasing habits. This is seeing positive engagement and customer retention rates.

Speaker #2: E-commerce growth remains strong in FY26 and accelerated in H2, reflecting customer investment and network expansion. On-demand continues to be the fastest growing area, driven by our Ultra Convenience and Direct to Door Now propositions.

Amanda Bardwell: On-demand continues to be the fastest growing area, driven by our ultra-convenience and Direct to boot now propositions. Delivery orders delivered in less than 2 hours increased to 47% of delivery sales, up 7 points on the prior year, with over 850 stores now offering on-demand services. Direct to boot now more than doubled sales in the year as we have continued to increase capacity to support demand. A growing pickup mix, as well as growth in high-margin propositions, helped support a significant improvement in e-com profit during the year, together with strong productivity and increased scale. Slide 15, execution. Our retail execution has continued to improve over the year. We have delivered better availability for customers through targeted initiatives, including holding more stock weight on key promotional lines and increasing the number of store deliveries over the weekend.

Speaker #2: Delivery orders delivered in less than two hours increased to 47% of delivery sales, up 7 points on the prior year, with over 850 stores now offering on-demand services.

Speaker #2: Direct-to-debut now, more than doubled sales in the year as we've continued to increase capacity to support demand. A growing pickup mix, as well as growth in high-margin propositions, helped support a significant improvement in e-com profit during the year, together with strong productivity and increased scale.

Speaker #2: Slide 15. Execution. Our retail execution has continued to improve over the year, with better availability delivered for customers through targeted initiatives, including holding more stock weight on key promotional lines and increasing the number of store deliveries over the weekends.

Speaker #2: While we saw some volatility in Q3 due to surge buying driven by the Middle East conflict, pleasingly, we've seen a recovery in on-shelf availability in Q4, with our out-of-stocks customer metric ending the year above FY25.

Amanda Bardwell: While we saw some volatility in Q3 due to surge buying driven by the Middle East conflict, pleasingly, we have seen a recovery in on-shelf availability in Q4, with our out-of-stocks customer metric ending the year above F25. Our Moorebank supply chain precinct in New South Wales is performing strongly, with the NDC fully operational and the RDC ramping up well with current throughput of over 2.4 million cartons per week. Turning to slide 16. In New Zealand, progress on our customer strategy and strong cost discipline delivered an improvement in earnings for the year. However, lower sales growth, driven by a customer flight to value and disruption from the store operating model changes, led to a more challenging H2. Key operational metrics have improved over the course of H2, and we are confident that the new operating model will deliver an improved team experience and customer experience once embedded.

Speaker #2: Our Moorebank supply chain precinct in New South Wales is performing strongly, with the NDC fully operational and the RDC ramping up well with current throughput of over 2.4 million cartons per week.

Speaker #2: Turning to slide 16. In New Zealand, progress on our customer strategy and strong cost discipline delivered an improvement in earnings for the year. However, lower sales growth, driven by a customer flight to value and disruption from the store operating model changes, led to a more challenging H2.

Speaker #2: Key operational metrics have improved over the course of H2, and we are confident that the new operating model will deliver an improved team experience and customer experience once embedded.

Speaker #2: While not satisfied with our overall performance, we made good progress on our transformation during the year, with investment in Everyday Rewards and value, a wider own brand range, and greater convenience supporting improvements in our customer metrics and brand scores.

Amanda Bardwell: While not satisfied with our overall performance, we made good progress on our transformation during the year, with investment in Everyday Rewards and value, a wider own brand range, and greater convenience, supporting improvements in our customer metrics and brand scores. Turning to slide 17 and BIG W. BIG W returned to profitability in F26 as improvements to our range and better execution throughout the year, particularly in clothing, led to a higher proportion of full-priced sales and with less clearance and markdowns. Digital and e-commerce growth remained a highlight, with digital visits up 13% on the prior year and total GTV sales, which includes BIG W Market, increasing by 3.7%. In New Zealand, trading conditions are expected to remain subdued. We are focused on restoring sales momentum by delivering more value, further enhancements to our range, and greater convenience to customers to deliver an improved financial performance in F27.

Speaker #2: Turning to slide 17 and BW. BW returned to profitability in FY26 as improvements to our range and better execution throughout the year, particularly in clothing, led to a higher proportion of full-priced sales with less clearance and markdowns.

Speaker #2: Digital and e-commerce growth remained a highlight, with digital visits up 13% on the prior year, and total GTB sales, which includes BW Market, increasing by 3.7%.

Speaker #2: In New Zealand, trading conditions are expected to remain subdued. We have focused on restoring sales momentum by delivering more value, further enhancements to our range, and greater convenience to customers to deliver an improved financial performance in FY27.

Speaker #2: While trading conditions for BW are also expected to remain challenging, our focus will be to build on progress in FY26 through an improved in-store experience, a differentiated range, targeted value investments, and accelerating e-commerce convenience.

Amanda Bardwell: While trading conditions for BIG W are also expected to remain challenging, our focus will be to build on progress in F26 through an improved in-store experience, a differentiated range, targeted value investments, and accelerating e-com convenience. Turning to slide 19 and our complementary businesses and services. Finally, our complementary businesses and services made a significant contribution to group earnings, contributing around a third of the group's EBIT growth in F26. Some highlights that I want to share. Petstock saw a comparable sales growth of 5.8% with strong e-com growth following a value reset and investment in its e-commerce proposition. PFD had a strong year with solid sales and EBIT growth, despite food service channels being impacted by a reduction in out-of-home spend in H2, and quick-service restaurant sales remained resilient.

Speaker #2: Turning to slide 19 and our complementary businesses and services. Finally, our complementary businesses and services made a significant contribution to growth in earnings, contributing around a third of the group's EBIT growth in FY26.

Speaker #2: Some highlights that I want to share: Petstock saw comparable sales growth of 5.8%, with strong e-commerce growth following a value reset and investment in its e-commerce proposition.

Speaker #2: PFD had a strong year with solid sales and EBIT growth. Despite the food service channel being impacted by a reduction in out-of-home spend in H2, quick service restaurant sales remained resilient.

Speaker #2: Media, rewards, and services grew strongly, with mobile a highlight, and growth in freight, warehousing, and international services drove a strong performance in PC Plus.

Amanda Bardwell: Media, rewards, and services grew strongly with mobile a highlight, and growth in freight, warehousing, and international services drove a strong performance in PC Plus. Turning to slide 20. In February, I spoke about the strong foundations we've established to unlock the next phase of AI. We believe AI will help deliver better experiences for customers, for teams, and will help us transform our operations and workflows. While we have a number of projects underway, this slide reflects some of the initiatives that are driving real impact. While I've already spoken about the transformation of Olive through agentic commerce, other highlights include our new marketing assistance suite, which has transformed the production of our weekly catalog through leveraging AI across planning, drafting, and production to bring customer-focused offers to the market faster.

Speaker #2: Turning to slide 20. In February, I spoke about the strong foundations we've established to unlock the next phase of AI. We believe AI will help deliver better experiences for customers and teams, and will help us transform our operations and workflows.

Speaker #2: While we have a number of projects underway, this slide reflects some of the initiatives that are driving real impact. While I've already spoken about the transformation of Olives through agentic commerce, other highlights include our new marketing assistant suite, which has transformed the production of our weekly catalog by leveraging AI across planning, drafting, and production to bring customer-focused offers to the market faster.

Speaker #2: We're also empowering our team with tools to help make better decisions and to free up their time to focus on customers. An example of this is our Team Assist platform, which is already managing over 7,000 queries per week and resolving 9 in 10 before reaching our advisory team.

Amanda Bardwell: We are also empowering our team with tools to help make better decisions and to free up their time to focus on customers. An example of this is our Team Assist platform, which is already managing over 7,000 queries per week and resolving nine in 10 before reaching our advisory team. Finally, moving to progress against our sustainability initiatives on slide 21. Following the conclusion of our five-year sustainability plan, we launched our 2030 plan, which resets our ambition for the next phase of our sustainability journey. The new plan focuses on five material areas. We've continued to restore soft plastic recycling across our store network, with 108 locations added in H2, bringing the total to over 700 locations. We also continued our partnership with food rescue organizations, including OzHarvest, and donated the equivalent of over 44 million meals in F26 through surplus food donations.

Speaker #2: Finally, sustainability initiatives on slide 21. Following the conclusion of our five-year sustainability plan, we launched our 2030 plan, which resets our ambition for the next phase of our sustainability journey.

Speaker #2: The new plan focuses on five material areas. And we've continued to restore soft plastic recycling across our store network, with 108 locations added in H2, bringing the total to over 700 locations.

Speaker #2: We also continued our partnership with food rescue organizations, including Odd Harvest, and donated the equivalent of over 44 million meals in FY26 through surplus food donations.

Speaker #2: I'll now hand over to Steve, who will cover our financial results in more detail.

Amanda Bardwell: I'll now hand over to Steve, who'll cover off our financial results in more detail.

Speaker #3: Thanks, Amanda, and good morning, everyone. I'll start on slide 25 with the FY26 results summary for the group. Group sales for FY26 increased 3.6% to $71.5 billion, with all trading segments reporting growth.

Stephen Harrison: Thanks, Amanda, and good morning, everyone. I will start it on slide 25 with the FY26 results summary for the group. Group sales for FY26 increased 3.6% to AUD 71.5 billion, with all trading segments reporting growth. H2 sales increased by 3.8%. Group e-commerce sales increased by 16.9%, with an acceleration in growth in the second half to 17.2%, primarily driven by strong on-demand growth in Australian Food. Group EBIT before significant items increased by 12.7% to AUD 3.1 billion, with the group's EBIT margin increasing by 35 basis points to 4.3%. H2 group EBIT before significant items increased by 10.9%.

Speaker #3: Second half sales increased by 3.8%. Group e-commerce sales increased by 15.9%, with an acceleration in growth in the second half to 17.2%, primarily driven by strong on-demand growth in Australian Food.

Speaker #3: Group EBIT before significant items increased by 12.7% to $3.1 billion, with the Group's EBIT margin increasing by 35 basis points to 4.3%. Half 2 Group EBIT before significant items increased by 10.9%.

Speaker #3: Group impact attributed to equity holders of the parent entity before significant items was $1.599 billion, up 15.4%, with lower interest costs resulting in impact growth ahead of EBIT growth for the year.

Stephen Harrison: Group NPAT attributable to equity holders of the parent entity before significant items was AUD 1.599 billion, up 15.4%, with lower interest costs resulting in NPAT growth ahead of EBIT growth for the year. The group delivered improved shareholder returns in FY26, with group ROE of 16.4%, an increase of 2.7 points compared to the prior year. Including significant items, NPAT attributable to equity holders of the parent entity increased by 18.1% to AUD 1.138 billion. Turning to slide 26 and our group trading performance. In Australian Food, total sales increased by 4.6% to AUD 53.9 billion in FY26. Excluding the impact of cycling industrial action in H1 last year, sales would have increased by 4%.

Speaker #3: The group delivered improved shareholder returns in FY26, with Group ROFI of 16.4%, an increase of 2.7 points compared to the prior year. Including significant items, NPAT attributed to equity holders of the parent entity increased by 18.1% to $1.138 billion.

Speaker #3: Turning to slide 26 and our group trading performance. In Australian Food, total sales increased by 4.6% to $53.9 billion in FY26. Excluding the impact of cycling industrial action in H1 last year, sales would have increased by 4.0%.

Speaker #3: Within Australian Food, Woolworths Food retail sales increased by 4.5% for the year, with half two increasing growth to 5.7%, reflecting our targeted investment in value.

Stephen Harrison: Within Australian Food, Woolworths Food Retail sales increased by 4.5% for the year, with H2 increasing growth to 5.7%, reflecting our targeted investment in value, our customer offer, and improvements in availability and overall execution. WooliesX sales increased by 17%, driven by strong e-commerce growth of 18.6% for the year and 9.6% growth from digital and media rewards and services. Australian Food EBIT increased by 8.5%, with H2 growth of 7% within the mid-to-high single-digit guidance range we provided. Excluding the impact of industrial action in FY25 and supply chain implementation costs, FY26 EBIT would have increased by 4.8% and by 6.1% for the second half.

Speaker #3: Our customer offering improvements in availability and overall execution. Lead X sales increased by 17%, driven by strong e-commerce growth of 18.6% for the year and 9.6% growth from digital and media rewards and services.

Speaker #3: Australian Food EBIT increased by 8.5%, with half two growth of 7%, within the mid- to high-single-digit guidance range we provided. Excluding the impact of industrial action in FY25 and supply chain implementation costs, FY26 EBIT would have increased by 4.8% and by 6.1% for the second half.

Speaker #3: Gross margin declined by two basis points to 28.6%, or excluding tobacco declined 20 basis points, reflecting price and promotional investment. In supply chain, this was offset by buying benefits, growth from our supplementary services including Cartology and Everyday, and a modest improvement in stock loss in the year.

Stephen Harrison: Gross margin declined by 2 basis points to 28.6%, or excluding tobacco, declined 20 basis points, reflecting price and promotional investment measures and supply chain costs, including fuel. Offsetting this were buying benefits, growth from our complementary services, including Cartology and Everyday, and a modest improvement in stock loss in the year. Our cost performance was a highlight, with CODB as a percentage of sales declining by 22 basis points in Australian Food, with productivity initiatives and above-store cost savings more than offsetting the inflation in store wages, volume growth, and higher online mix. WooliesX DAP and EBIT was up 70.3% in FY26, with eCom DAP increasing by 99%, driven by strong sales growth, a shift to higher margin convenient propositions, and productivity improvements.

Speaker #3: Our cost performance was a highlight, with CODB as a percentage of sales declining by 22 basis points in Australian Food, with productivity initiatives and above-store cost savings more than offsetting the inflation in store wages, EAs, volume growth, and higher online mix.

Speaker #3: We'll exec DAP, and EBIT was up 70.3% in FY26, with e-com DAP increasing by 99%, driven by strong sales growth, a shift to higher-margin, convenient propositions, and productivity impacts. Including cycling industrial action and cold chain investments in the prior year, e-commerce DAP would have increased by approximately 50%.

Stephen Harrison: Excluding some one-off impacts, including cycling industrial action and cold chain investments in the prior year, eComX DAP would have increased by approximately 50%. Woolworths New Zealand sales increased by 2.5% in NZD in F26, with EBIT increasing by 8.8%. The H2 was more challenging, with EBIT declining by 7.7%. A moderation in sales growth in H2, disruptions from the implementation of a new store operating model, and a reduction in gross margin led to lower EBIT in H2, despite good cost control. Gross margin was impacted by price investments as well as higher stock costs associated with the new store operating model, with impacts moderating through Q4.

Speaker #3: New Zealand sales increased by 2.5% in New Zealand dollars in FY26, with EBIT increasing by 8.8%. The second half was more challenging, with EBIT declining by 7.7%.

Speaker #3: A moderation in sales growth in half two, disruption from the implementation of a new store operating model, and a reduction in gross margin led to lower EBIT in half two.

Speaker #3: Despite good cost control, gross margin was impacted by price investments, as well as higher stock loss associated with the new store operating model, with impacts moderating through Q4.

Speaker #3: In Australian B2B sales for FY26, sales increased by 4.2%, and H2 sales increased by 3.5%, driven by strong PFD, PC Plus, and export meat sales.

Stephen Harrison: In Australian B2B, sales for F26 increased by 4.2%, and H2 sales increased by 3.4%, driven by strong PFD, Primary Connect Plus, and export meat sales. B2B EBIT increased by 13%, with growth driven by higher volumes and cost efficiencies from Primary Connect Plus and resilient sales and strong cost control in PFD. H2 increased EBIT by 10.8% on the prior year. Total W Living sales increased by 0.7% in F26 and 0.6% in the H2. Full year EBIT of AUD 116 million increased materially on the prior year loss of AUD 31 million. BIG W's F26 sales increased by 0.9% with EBIT of AUD 64 million, an improvement of AUD 97 million versus last year.

Speaker #3: B2B EBIT increased by 13%, with growth driven by higher volumes and cost efficiencies from PC Plus, as well as resilient sales and strong cost control in PFD.

Speaker #3: The second half increased EBIT by 10.8% on the prior year. Total Woolworths Living sales increased by 1.7% in FY26, and by 0.6% in the second half.

Speaker #3: Four-year EBIT of $116 million increased materially on the prior year loss of $31 million. BW's FY26 sales increased by 0.9%, with EBIT of $64 million, an improvement of $97 million versus last year.

Speaker #3: EBITDA, which excludes the benefit from lower depreciation due to impairments in FY25, increased by 28%, reflecting improved gross margin due to higher full-price sales and strong cost control.

Stephen Harrison: EBITDAR, which excludes the benefit from lower depreciation due to impairments in F25, increased by 28%, reflecting improved gross margin due to higher full-price sales and strong cost control. Petstock sales increased by 12.3%, reflecting strong e-commerce and own brand growth and the benefit from prior year acquisitions. Full year EBIT increased by 33.5% with good and solid underlying growth. The prior year also includes in W Living losses from MyDeal which reduced substantially in F26 following the closure of MyDeal in Q1. The other segment recorded a loss before interest and tax of AUD 260 million, an increase of 23.4% on the prior year, largely driven by lower gains from disposals of properties, higher short-term incentive costs, and costs associated with the transition of BIG W to a standalone systems platform.

Speaker #3: Petstock sales increased by 12.3%, reflecting strong e-commerce and own brand growth, as well as the benefit from prior year acquisitions. Four-year EBIT increased by 33.5%, with good and solid underlying growth.

Speaker #3: The prior year also includes in W Living losses from mydeal, which reduced substantially in FY26 following the closure of mydeal in Q1.

Speaker #3: The other segment recorded a loss before interest and tax of $260 million, an increase of 23.4% on the prior year, largely driven by lower gains from disposal of properties, higher short-term incentive costs, and costs associated with the transition of BW to a standalone systems platform.

Speaker #3: The Group also reported significant items after tax of $461 million for F26, largely related to one-off costs associated with the remediation of award-covered salary team members, as disclosed in half one.

Stephen Harrison: The group also reported significant items after tax of AUD 461 million for F26, largely related to one-off costs associated with the remediation of award-covered salary team members, as disclosed in H1. Moving to slide 27 now, key balance sheet metrics. Average inventory days declined on the prior year, reflecting the group's solid sales growth despite higher dollar inventory holdings to mitigate potential supply chain disruptions, particularly in Australian Food, as well as improved inventory management in BIG W. Average payable days increased on the prior year, largely reflecting the benefit of improved sales momentum in the H2 and higher stock purchases. ROFI increased 2.7 points to 16.4%, with ROFI in all trading segments increasing on the prior year. An Australian Food ROFI of 29.2% was up 2.4 points in the year. Moving to slide 28 and our capital management framework.

Speaker #3: Moving to slide 27 and our key balance sheet metrics. Average inventory days declined on the prior year, reflecting the Group's solid sales growth, despite higher dollar inventory holdings to mitigate potential supply chain disruptions, particularly in Australian Food, as well as improved inventory management in BW.

Speaker #3: Average payable days increased on the prior year, largely reflecting the benefit of improved sales momentum in the second half and higher stock purchases. ROFE increased roughly 2.7 points to 16.4%, with ROFE in all trading segments increasing on the prior year.

Speaker #3: And Australian Food, roughly 29.2%, was up 2.4 points in the year. Moving to slide 28 and our capital management framework: the Group generated strong operating cash flows in FY26, which were invested in sustaining our assets, funding our dividends, and investing in growth.

Stephen Harrison: The group generated strong operating cash flows in F26, which were invested in sustaining our assets, funding our dividends, and investing in growth. I will provide some further color on this over the following slides. Moving to slide 29 and our cash flow. The group reported operating cash flow before interest and tax of AUD 6.5 billion for F26, an increase of 5.2%. This was driven by EBITDA growth before significant items of 6.7%. The net working capital and non-cash movement was largely driven by higher employee-related accruals and non-cash-based share payment expense. Tax paid declined by 9.1% due to a lower final payment of the F25's income tax return paid in F26, which was somewhat offset by higher tax installment payments in F26. Cash used in investing activities of AUD 2 billion primarily relates to the group's CapEx spend, which I will talk about on the next slide.

Speaker #3: And I'll provide some further color on this over the following slides. Moving to slide 29 and our cash flow, the group reported operating cash flow before interest and tax of $6.5 billion for FY26, an increase of 5.2%.

Speaker #3: This was driven by EBITDA growth before significant items of 6.7%. The net working capital and non-cash movement was largely driven by higher employee-related accruals and non-cash-based share payment expense.

Speaker #3: Tax paid declined by 9.1% due to a lower final payment of the FY25 income tax return, paid in FY26, which was somewhat offset by a higher tax installment payment in FY26.

Speaker #3: Cash used in investing activities of $2 billion primarily relates to the group's capex, which I'll talk about on the next slide. Lower dividends paid in FY26 was due to the prior year including $498 million related to a special dividend.

Stephen Harrison: Lower dividends paid in F26 was due to the prior including AUD 498 million related to a special dividend. After lease principal payments and dividends, the group generated positive net cash flow for the year of AUD 346 million. Finally, our cash realization ratio of 107% reflected an increase in working capital and non-cash. Moving to slide 30 and CapEx. Operating CapEx for F26 was AUD 1.84 billion, AUD 187 million lower than the prior year. A reduction in sustaining CapEx primarily related to lower spend on store renewals in Australia in F26. This was due to initiatives to deliver more efficiency in our spend per store in Australian Food, importantly, without compromising our customer experience from our renewal. This was partially offset by an increase in growth CapEx, primarily reflecting increase in new store spend, including 17 new Australian supermarkets in the year.

Speaker #3: And after lease principal payments and dividends, the group generated positive net cash flow for the year of $346 million. Finally, our cash realization ratio of 107% reflected an increase in working capital and non-cash.

Speaker #3: Moving to slide 30 and capex: operating capex for FY26 was $1.84 billion, $187 million lower than the prior year. This reduction in sustaining capex was primarily related to lower spend on store renewals in Australia in FY26.

Speaker #3: This was due to initiatives to deliver more efficiency in our spend for stores in Australian Food, importantly without compromising our customer experience from our renewals.

Speaker #3: This was partially offset by an increase in gross capex, primarily reflecting an increase in new store spend, including 17 new Australian supermarkets in the year.

Speaker #3: Gross capex was broadly unchanged on the prior year, reflecting an increase in net property development spend. In F27, we expect operating capex to be in the range of $1.9 to $2 billion.

Stephen Harrison: Growth CapEx was broadly unchanged on the prior year, reflecting an increase in net property development spend. In F27, we expect operating CapEx to be in the range of AUD 1.9 to AUD 2 billion. Moving to an update on our supply chain on slide 31. Many of you had the opportunity to visit our Moorebank Precinct late last year. The NDC has been operating strongly for some time now, and pleasingly, the regional distribution center has now achieved volume milestones ahead of expectation. Both sites combined are averaging over 4.5 million cartons per week, and the Moorebank RDC is consistently reaching 2.4 million cartons per week, servicing over 300 stores and almost 7,000 SKUs. The successful ramp-up of the facility led us to ceasing ambient operations at our Minchinbury RDC in April this year.

Speaker #3: Now, moving to an update on our supply chain on slide 31. Many of you had the opportunity to visit our Moorebank precinct last year.

Speaker #3: The NDC has been operating strongly for some time now, and pleasingly, the regional distribution center has now achieved volume milestones ahead of expectations. Both sites combined are averaging over 4.5 million cartons per week, and the Moorebank RDC is consistently reaching 2.4 million cartons per week, servicing over 300 stores and almost 7,000 SKUs.

Speaker #3: The successful ramp-up of the facility led us to cease ambient operations at a mentionary RDC in April this year. Construction of our Sydney Chilled and Fresh DC remains on track, with an expected launch early next calendar year for the chilled chamber of the DC.

Stephen Harrison: Construction of our Sydney Chilled and Fresh DC remains on track, with an expected launch early next calendar year for the chilled chamber of the DC. In F27, we expect a modest reduction in commissioning, transition, and dual running costs and continue to expect the benefits from these facilities to materially offset the commissioning, transition, and dual running costs of our supply chain investments. Finally, moving to dividends and funding on slide 32. The board today approved a final dividend of AUD 0.52 per share, which is an increase of 15.6% on the prior year. This brings the total ordinary dividend for the year to AUD 0.97 per share, an increase of 15.5%, in line with the NPAT growth for the year, with the full-year payout ratio of 74.1% at the higher end of our 70% to 75% payout range.

Speaker #3: In FY27, we expect a modest reduction in commissioning, transition, and dual running costs, and we continue to expect the benefits from these facilities to materially offset the commissioning, transition, and dual running costs of our supply chain investments.

Speaker #3: Finally, moving to dividends and funding on slide 25—sorry, 32. The Board today approved a final dividend of 52 cents per share, which is an increase of 15.6% on the prior year.

Speaker #3: This brings the total ordinary dividend for the year to 97 cents per share, an increase of 15.5%, in line with impact growth for the year, with the full-year payout ratio of 74.1%, at the higher end of our 70% to 75% payout range.

Speaker #3: After payment of the final dividend, our franking credit balance will be approximately $1.3 billion. Turning to our balance sheet settings, our net debt to EBITDA ratio was 2.5 times, lower than FY25, and remains well within our leverage threshold.

Stephen Harrison: After payment of the final dividend, our franking credit balance will be approximately AUD 1.3 billion. Turning to our balance sheet settings, our net debt to EBITDA ratio was 2.5 times, lower than F25 and remaining well within our leverage threshold. We remain committed to solid investment-grade credit ratings and have significant headroom under our current ratings of BBB from S&P and Baa2 from Moody's. Thanks. I will now turn back to Amanda.

Speaker #3: And we remain committed to solid investment-grade credit ratings and have significant headroom under our current ratings of BBB from S&P and Baa2 from Moody's.

Speaker #3: Thanks, and I will now turn back to Amanda.

Speaker #1: Thanks, Steve. Finally, now turning to current trading and outlook. Woolworths Food Retail total sales increased by 7.6% for the first eight weeks of the financial year, with a continuation of the momentum from Q4 into FY27, primarily driven by item growth.

Amanda Bardwell: Thanks, Steve. Finally now turning to current trade and outlook. Woolworths Food Retail total sales increased by 7.6% for the first 8 weeks of the financial year, with a continuation of the momentum from Q4 into F27, primarily driven by item growth. Sales momentum was further strengthened during the period by the success of our Disney Ooshies collectibles campaign, which is estimated to have added approximately 1.5 to 2 points of incremental sales growth. Customers are expected to remain value-focused in the year ahead, and we are committed to limiting and impacting the rise in costs through providing low and dependable prices. Wage growth will also remain elevated, reflecting the current year's wage rate increases and progressive changes to pay for our 18 and 19-year-old retail team members.

Speaker #1: Sales momentum was further strengthened during the period by the success of our Disney Ushis collectibles campaign, which is estimated to have added approximately 1.5 to 2 points of incremental sales growth.

Speaker #1: Customers are expected to remain value-focused in the year ahead, and we're committed to limiting and mitigating the rise in costs through providing low and dependable prices.

Speaker #1: Wage growth will also remain elevated, reflecting this year's wage rate increases and progressive changes to pay for our 18- and 19-year-old retail team members.

Speaker #1: These cost pressures challenge us to be even more efficient, leveraging technology to be more productive in order to reinvest back in the business for our customers.

Amanda Bardwell: These cost pressures challenge us to be even more efficient, leveraging technology to be more productive in order to reinvest back in the business for our customers. Woolworths New Zealand Food total sales of 4.2% in the first 8 weeks has seen an improvement in momentum relative to Q4, with some benefit from the Disney Ooshies program. In BIG W, total sales in the first 8 weeks declined modestly on the prior year, reflecting ongoing cost of living pressures on households, particularly budget customers, and weaker trade in the everyday business. Our focus for both businesses will be on building on the progress we have made in F26. In summary, we are pleased with the momentum we have achieved in F26.

Speaker #1: New Zealand Food total sales growth of 4.2% in the first eight weeks has seen an improvement in momentum relative to Q4, with some benefit from the Disney Ushis program.

Speaker #1: In BW, total sales in the first eight weeks declined modestly on the prior year, reflecting ongoing cost-of-living pressures on households, particularly budget customers.

Speaker #1: And weaker trade in the everyday business. Our focus for both businesses will be on building on the progress we've made in FY26. In summary, we are pleased with the momentum we have achieved in FY26.

Speaker #1: While we expect the challenging economic environment to continue, with household budgets remaining under pressure, our strategy to deliver low prices and the best range and convenience gives us confidence we can be the first choice for our customers, while delivering for our team and our shareholders in the year ahead.

Amanda Bardwell: While we expect the challenging economic environment to continue with household budgets remaining under pressure, our strategy to deliver low prices at the best range and convenience gives us confidence we can be the first choice for our customers while delivering for our team and our shareholders in the year ahead. The progress this year would not have been possible without our dedicated team, and I want to thank them for their incredible efforts during the year. I also want to thank our customers for choosing Woolworths. I look forward to sharing further progress on our strategy at our upcoming Investor Day in November. I will now turn the call over to the operator for questions. To give everyone a chance, can I please ask that you limit it to one question per person and then rejoin the queue with any follow-up questions. Thank you.

Speaker #1: The progress this year would not have been possible without our dedicated teams, and I want to thank them for their incredible efforts during the year.

Speaker #1: And I also want to thank our customers for choosing Woolworths. I look forward to sharing further progress on our strategy at our upcoming Investor Day in November.

Speaker #1: I'll now turn the call over to the operator for questions to give everyone a chance. Can I please ask that you limit it to one question per person, and then rejoin the queue with any follow-up questions?

Speaker #1: Thank you.

Speaker #2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are using a handset, please pick up the handset to ask your question. The first question today comes from Adrian Lemme from Citi. Please go ahead.

Speaker #2: If you're using a handset, please pick up the handset to ask your question. The first question today comes from Adrian Lemmy from Citi. Please go ahead.

Speaker #3: Hi, good morning Amanda, Stephen, and team. Interested in the trading update. If you exclude the estimated Ooshies impact, that still implies an acceleration in sales growth.

Adrian Lemme: Hi. Good morning, Amanda, Steve, and team. I am interested in the trading update. If you exclude the estimated Ooshies impact, that still implies an acceleration in sales growth. Are there any signs of pantry stocking in long life food or non-food categories that would at least partly explain the strength, please?

Speaker #3: Are there any signs of pantry stocking in long-life food or non-food categories that would at least partly explain the strength, please?

Speaker #1: Yeah, thanks, Adrian, for the question. It's important when we're just looking at the trading performance for the first eight weeks. I mean, that really starts with very consistent, strong growth across the entire half of the year.

Amanda Bardwell: Yeah. Thanks, Adrian, for the question. It is important when we are just looking at the trading performance for the first 8 weeks. I mean, that really starts with a very consistent strong growth across the entire H2 of the year. We have been steadily but surely building in terms of items and customers across that period. We did bring that momentum, particularly from Q4 into the early weeks of Q1. As you say, the Ooshies program was very popular with customers, and we saw that amplification even since that is now completed just in the last couple of weeks we have seen good, strong momentum continue. From our perspective, it has been a really strong program that has given some great surprise and delight moments to our existing customers.

Speaker #1: And so we've been steadily but surely building in terms of items and customers across that period. And so we did bring that momentum, particularly from Q4, into the early weeks of Q1.

Speaker #1: And then, as you say, the Ushies program was very popular with customers, and we saw that amplification. Even since that's now completed, just in the last couple of weeks, we've seen good, strong momentum continue.

Speaker #1: And so from our perspective, it's been a really strong program that's given some great surprise-and-delight moments to our existing customers. We certainly saw some customers add a few more items to their basket, and so there might be, in some of those pantry areas in particular, a little bit of extra item growth that we saw.

Amanda Bardwell: We certainly saw some customers add a few more items to their basket, and so they might be in some of those pantry areas in particular, a little bit of extra item growth that we saw. We also saw new customers that came and experienced Woolworths and the better experience that we are offering. We are expecting to see very consistent, strong momentum continue as we look forward. Very much aligned with the momentum that we had in Q4.

Speaker #1: But we also saw new customers that came and experienced Woolworths, and the better experience that we're offering. And so, we're expecting to see very consistent, strong momentum continue as we look forward.

Speaker #1: Very much aligned with the momentum that we had in Q4.

Speaker #3: Thanks, Amanda, and congrats on the result.

Adrian Lemme: Thanks, Amanda, and congrats on the result.

Speaker #1: Thank you.

Amanda Bardwell: Thank you.

Speaker #2: Thank you. The next question comes from Tom Kiraf from Barron Joey. Please go ahead.

Operator: Thank you. The next question comes from Thomas Kierath from Barrenjoey. Please go ahead.

Speaker #4: Oh, morning, guys. Just got a question on depreciation and amortization. It came in a lot lower, certainly, than I was expecting—I think lower than most people's expectations. And in the second half, it was actually a bit lower in some of the divisions as well.

Thomas Kierath: Morning, guys. Just got a question on depreciation, amortization. It came in a lot lower, certainly than I was expecting. I think versus most people's expectations. In the second half it was actually a bit lower in some of the divisions. Was there a, I don't know, changing accounting policy or just a bit of color around that and how we should maybe think about it into FY27, please?

Tom Kierath: Morning, guys. Just got a question on depreciation, amortization. It came in a lot lower, certainly than I was expecting. I think versus most people's expectations. In the second half it was actually a bit lower in some of the divisions. Was there a, I don't know, changing accounting policy or just a bit of color around that and how we should maybe think about it into FY27, please?

Speaker #4: Was there, I don't know, a change in accounting policy, or just—yeah, a bit of color around that and how we should maybe think about it into FY27, please?

Speaker #3: Yeah, Tom, thanks for the question. The way I look at it, we've been pretty stable and consistent in our capital spend for about the last four or five years.

Stephen Harrison: Yeah, Tom, thanks for the question. The way I look at it, we've been pretty stable and consistent in our capital spend for about the last four or five years. We've been somewhere between AUD 1.85 billion and AUD 2 billion in the last four years. It's not a surprise to us to see depreciation start to just come back a little bit in terms of growth rates. I think a couple of things just important to note. The first one is obviously we got the benefit in BIG W from asset impairments in the prior year, so we did see a reduction in depreciation in BIG W. With the currency translation of the New Zealand dollar with the devaluation of the New Zealand dollar, depreciation was broadly flat in NZD. Actually, when you convert that back to Australian dollar you do see a reduction.

Speaker #3: So we've been somewhere between $1.85 and $2 billion for the last four years, so it's not a surprise to us to see depreciation start to just come back a little bit in terms of growth rates.

Speaker #3: I think it is a couple of things just important to note. The first one is, obviously, we got the benefit in BW from asset impairments in the prior year.

Speaker #3: And so we did see a reduction in depreciation in BW. And with the current translation of the New Zealand dollar, with the devaluation of the New Zealand dollar, depreciation was broadly flat in NZD, but actually, when you convert that back to Australian dollars, you do see a reduction.

Speaker #3: So, we do still expect modest growth in depreciation moving forward, but hopefully that addresses the slowdown that you observed in the second half.

Stephen Harrison: We do still expect modest growth in depreciation moving forward. Hopefully that sort of addresses that slowdown that you observed in the second half.

Speaker #4: Great. That's good. Thanks, Steve.

Thomas Kierath: Great. That's good. Thanks, Steve.

Tom Kierath: Great. That's good. Thanks, Steve.

Speaker #2: Thank you. The next question comes from Peter Marks from Goldman Sachs. Please go ahead.

Operator: Thank you. The next question comes from Peter Marks from Goldman Sachs. Please go ahead.

Peter Marks: Morning, Amanda and Steve. Can I just ask on the Australian Food cost doing business?

Speaker #5: Morning, Amanda and Steve. Can I just ask about the Australian food cost of doing business?

Amanda Bardwell: Sorry, Peter, I do not know if you can hear. Would you mind just speaking up? We are having a little trouble hearing you.

Speaker #1: Sorry, Peter. I don't know if you can hear it. Would you mind just speaking up? We're having a little trouble hearing you.

Speaker #5: You've got me now.

Peter Marks: You got me now?

Amanda Bardwell: Sadly. Keep asking your question, we will see if we can.

Speaker #1: Faintly. We'll keep asking you questions, and we'll see if we can increase.

Peter Marks: Sorry, guys. Have you got me now?

Speaker #5: Okay, sorry, guys. Have you got me now? Sorry about that. Just on the Aussie Food CODB outlook—we can see, I guess, the wage impact coming, but can you talk about some of the benefits that you might have coming in FY27 that might be able to offset that?

Peter Marks: Sorry, guys. Have you got me now?

Amanda Bardwell: We've got you now, Peter. Thank you.

Peter Marks: Sorry about that. Just on the Australian Food CODB outlook, we can see the wage impact coming, but can you talk about some of the benefits that you might have coming in FY27 that might be able to offset that? Just noticed there was some press on possibly offshoring some roles, and I think you're probably carrying some system replacement costs in FY26 that should roll out. Are there anything else we should be thinking about there?

Speaker #5: Just noticed there was some press on possibly offshoring some roles, and I think you're probably carrying some system replacement costs in FY26 that should roll out. But are there?

Speaker #1: Yeah, thanks, Peter, for the question. As you know, we've been really clear about the way we want to run the business, which is starting with welcoming more customers to shop with us and really driving that volume growth across the Australian Food business, and then being very disciplined in the way that we run the business from a productivity and also from a cost discipline perspective.

Amanda Bardwell: Yeah. Thanks, Peter, for the question. As you know, we've been really clear about the way we want to run the business, which is starting with welcoming more customers to shop with us and really driving that volume growth across the Australian Food business, then being very disciplined in the way that we run the business from a productivity and also from a cost discipline perspective. We were certainly pleased with the results that we were able to deliver in terms of that CODB reduction in Australian Food in F26. Our focus will remain on delivering, and really being very focused on productivity and cost discipline going forward. If you look at that, we've got, as you know, 4.75% increase in wages for our team that we're very cognizant of in terms of the ever-increasing costs.

Speaker #1: And we were certainly pleased with the results that we were able to deliver in terms of that CODB reduction in Australian Food in FY26.

Speaker #1: And our focus will remain on delivering and really being very focused on productivity and cost discipline going forward. And so, you look at that—we've got, as you know, a 4.75% increase in wages for our team—that we're very cognizant of in terms of the ever-increasing costs.

Speaker #1: However, we've also got a very strong productivity pipeline across our stores and supply chain. As we've discussed previously, we are also looking to our support areas to contribute in terms of productivity and cost savings in the year ahead.

Amanda Bardwell: However, we have also got a very strong productivity pipeline across our stores, supply chain, and as we have talked previously, we also are looking to our support areas to contribute in terms of productivity and cost savings in the year ahead. We have announced our focus on continuing to expand our global support services as part of that. That is both about increasing our capability and access to global talent, and also being more efficient as we go forward. We continue to look at AI and the productivity that we are able to achieve through our areas like e-commerce. If you look at the e-commerce performance, I think a real highlight in terms of the improving profitability in those channels, much of that is about the application of technology to be able to just be more efficient in the way that we pick orders.

Speaker #1: And so we have announced our focus on continuing to expand our global support services. As part of that, that's both about increasing our capability and access to global talent, and also being more efficient as we go forward.

Speaker #1: We continue to look at AI and the productivity that we're able to achieve through our areas like e-commerce. If you look at the e-commerce performance, I think a real highlight in terms of the improving profitability in those channels, much of that is about the application of technology to be able to just be more efficient in the way that we pick orders.

Speaker #1: We also have more bank width now, being fully ramped up across the NDC and RDC, delivering some real benefits into the New South Wales stores—in particular, with pallets that arrive already sorted by aisle, really saving our team a lot of time in stores as well.

Amanda Bardwell: We also have Moorebank, which now being fully ramped up across the NDC and RDC, delivering some real benefits into the New South Wales stores, in particular with pallets that arrive already sorted by aisle, really saving our team a lot of time in stores as well. Certainly, we have got a strong focus going forward on increasingly being more productive, being very cost-disciplined, because we know that that enables us to invest in those prices and value that our customer expects and enables us to continue to improve those experiences as well.

Speaker #1: So, certainly, we've got a strong focus going forward on increasingly being more productive and being very cost disciplined, because we know that enables us to invest in those prices and the value that our customers expect.

Speaker #1: And it enables us to continue to improve those experiences, as well.

Speaker #5: That's great. Thank you.

Peter Marks: That is great. Thank you.

Speaker #2: Thank you. The next question comes from Michael Samotis from Jefferies. Please go ahead.

Operator: Thank you. The next question comes from Michael Simotas from Jefferies. Please go ahead.

Speaker #5: Hi, good morning everyone. My question is on WooliesX, and in particular the part that sits outside of the e-com business. You called out strength in media, rewards and services, and in particular, mobile.

Michael Simotas: Good morning, everyone. My question is on WooliesX, and in particular, the part that sits outside of the e-com business. You called out strength in media, rewards, and services, and in particular mobile. It looks like there is about AUD 100 million tailwind to the food business in FY26, but the contribution was smaller in the H2. Is that sort of normal seasonality, or was the step-up we saw in 2026 effectively done and it will not repeat and continue to be a tailwind into 2027?

Speaker #5: It looks like there's about a $100 million tailwind to the food business in FY26, but the contribution was smaller in the second half. Is that sort of normal seasonality, or was the step-up we saw in '26 effectively done and it won't repeat and continue to be a tailwind into '27?

Speaker #1: Yeah, thanks, Michael, for the question. When we look at the Woolies X segment that you're referring to there, we've got our Everyday Rewards, our services businesses as well, which performed very well alongside Cartology.

Amanda Bardwell: Yeah. Thanks, Michael, for the question. When we look at the WooliesX segment that you are referring to there, we have our Everyday Rewards, our services businesses as well, which performed very well alongside Cartology. What you are seeing reflected in the H2 is also the benefit of some of those cost savings starting to flow through from the simplification and cost reductions that we looked at across our corporate areas last year. Certainly, as we talked last year, that applied right across all aspects of our corporate office, including the WooliesX area, and so certainly that is now in our base going forward.

Speaker #1: What you're seeing reflected in the second half is also the benefit of some of those cost savings starting to flow through from the simplification and cost reductions that we looked at across our corporate areas last year.

Speaker #1: And so certainly, as we talked last year, that applied right across all aspects of our corporate office, including the WooliesX area, and so certainly that's now in our base going forward.

Speaker #5: Yeah, that makes sense. I'm just a little bit surprised that the contribution was smaller in the second half than in the first half. I thought it might have been the other way around.

Michael Simotas: Yeah, that makes sense. I am just a little bit surprised that the contribution was smaller in the H2 than the H1. I thought it might have been the other way around.

Speaker #1: Yeah, I think you just need to take into account that there'll also be some different seasonality that applies to some of those businesses as well.

Amanda Bardwell: Yeah. I think you just need to take into account that there will also be some different seasonality that applies to some of those businesses as well. So in particular, if you think about Cartology, there is a different profile depending on what programs we might be running across the food business, for example, and the participation of suppliers in those.

Speaker #1: So, in particular, if you think about cutology, there's a different profile depending on what programs we might be running across the Food business, for example, and the participation of suppliers in those.

Speaker #5: Yeah, cutology certainly has a half-one skew of phasing, but some of our teams will have started on their cost saving initiatives in the fourth quarter of last fiscal.

Stephen Harrison: Yeah. Cartology certainly has a H1 skew of phasing. Some of our teams will have started on their cost-saving initiatives in Q4 of last fiscal, so there will be just a difference in timing. Particularly some of those WooliesX specifics started in Q4, so you will not necessarily get the full run rate in that last quarter, Michael.

Speaker #5: And so, there'll be just a difference in timing. Particularly, some of those WooliesX businesses, I think, started in Q4, so you won't necessarily get the full run rate in that last quarter, Michael.

Speaker #2: Thank you. The next question comes from Sean Cousins from UBS. Please go ahead.

Operator: Thank you. The next question comes from Shaun Cousins from UBS. Please go ahead.

Speaker #4: Hi, thanks. Good morning. Amanda, Steven's team. Maybe just a question on the Australian Food and Customer Offer Reset program—this has been quite topical, and it seems to be an opportunity for Woolworths to expand its gross margins.

Shaun Cousins: Thanks. Good morning, Amanda, Stephen, team. Maybe just a question on Australian Food and customer offer reset program. This has been quite topical and it seems to be an opportunity for Woolworths to expand its gross margins. How should we think about this as a COGS or a lower COGS tailwind? What is the early evidence as you started to rationalize range, and what that has done for sales in those categories? Conscious there is a lot of noise with Ooshies and other broader momentum you have there. Really curious around what this does for your gross margins. It seems quite significant an opportunity for you. Thanks.

Speaker #4: How should we think about this as a COGS or a lower COGS tailwind? And maybe what's the early evidence as you've started to rationalise range, and what that's sort of done for sales in those categories? Conscious there's a lot of noise with Ushies and other broader momentum you've got there.

Speaker #4: But I'm really curious about what this does for your gross margins. It seems like quite a significant opportunity for you. Thanks.

Speaker #1: Yeah, thanks. Thanks, Sean, for the question. I'll give an overview and then I'll hand to Annette to add some color to this. So, customer offer reset for us, as you know, is really about stepping back and looking at each individual category and ensuring that we have got the offer right for our customers as a starting point.

Amanda Bardwell: Yeah, thanks. Thanks, Shaun, for the question. I will give an overview and then I will hand to Annette to add some color to this. Customer offer reset for us, as you know, is really about stepping back and looking at each individual category and ensuring that we have got the offer right for our customers as a starting point. Our focus is on making sure it is the right range, that we have got the right shelf capacity to be able to hold the range given customer demand. It is also about recognizing that we need to look for every opportunity to create more value and those low and dependable prices that we know are important in building customer trust.

Speaker #1: And so, our focus is on making sure it's the right range, that we've got the right shelf capacity to be able to hold the range, given customer demand.

Speaker #1: And it's also about recognizing that we need to look for every opportunity to create more value, and those low and dependable prices that we know are important in building customer trust.

Speaker #1: When it comes to our product margin, if you look at the results for Australian Food for the year that's just completed, there's actually a slight reduction in product margin in the year.

Amanda Bardwell: When it comes to our product margin, if you look at the results for Australian Food for the year that is just completed, there is actually a slight reduction in product margin in the year. Our focus, first and foremost, is actually on volume when we look at this program. That is what we are driving together. That is the conversation we have with our supply partners is how do we drive volume growth together as we move forward to the benefit of, firstly, our customers, our suppliers, and of course, Woolworths business as well. I will hand to Annette just to add a little bit of color in terms of what we are seeing.

Speaker #1: And so, our focus first and foremost is actually on volumes when we look at this program. That's what we're driving together. That's the conversation we have with our supply partners: How do we drive volume growth together as we move forward, to the benefit of, firstly, our customers, our suppliers, and of course, Woolworths' business as well.

Speaker #1: I'll hand to Annette just to add a little bit of color in terms of what we're seeing. Michael or Sean, whilst we've shared and been very open about the work that we're doing in this space as part of our range reviews, it's actually only in the last six or so weeks that some of the first ranges that were reviewed have rolled out to stores.

Amanda Bardwell: Mindful, Shaun, that whilst we have shared and been very open about the work that we are doing in this space as part of our range reviews, it is actually only in the last 6 or so weeks that some of the first ranges that were reviewed have rolled out to stores. It is very early days in terms of results. With that challenge, I will hand to Annette.

Speaker #1: And so, it is very, very early days in terms of results, but with that challenge, I'll hand to Annette.

Speaker #3: Yeah, thank you. Absolutely right, Amanda. The very first principle of going into a range review is to make sure that we have the absolute best possible offer for our customers.

Annette Karantoni: Yeah. No, thank you. Absolutely right, Amanda. The very first principle of going into a range review is to make sure that we have the absolute best possible offer for our customers. It really is about identifying opportunities where we might see the range needing to change and then apportioning the right space, of course, having the right value and price offers for customers. We have talked about quite a lot over the last 12 months, making sure the products are available when our customers are in our stores or our team are shopping for online. With those principles in mind, we are really fully committed to supporting growth and partnering with those suppliers that also believe in that strategic alignment on making sure we have affordable and dependable prices for our customers. That is really key.

Speaker #3: And so it really is about identifying opportunities where we might see the range needing to change, and then apportioning the right space. Of course, having the right value and price offers for customers—and we've talked about that quite a lot over the last 12 months—making sure the products are available when our customers are in our stores or our team.

Speaker #3: We're shopping for online. And so, with those principles in mind, we're really fully committed to supporting growth and partnering with those suppliers that also believe in that strategic alignment on making sure we have affordable and dependable prices for our customers.

Speaker #3: And so that's really key. To answer your specific question around how it's going—and Amanda's quite right—it's very early days in terms of what's actually landing in stores. But to give you a sense, we have had one of our bigger ranges in our past range review, and we saw an optimization of range.

Annette Karantoni: To answer your specific question around how is it going, and Amanda is quite right, it is very early days in terms of what is actually landing in stores. To give you a sense, we have had one of our bigger ranges in our pasta range reviewed. We saw an optimization of range. We did see in that example, a reduction of a range by about 5%. Not terribly material, but quite a significant improvement in availability of 13%. We are learning as we go, and as I said, working very strategically with those partners that are really supporting that view around making sure we have got great value and the right range for our customers.

Speaker #3: So, we did see in that example a reduction of range by about 5%. So, not terribly material, but quite a significant improvement in availability of 13%.

Speaker #3: And so we're learning as we go, and as I said, working very strategically with those partners that are really supporting that view around making sure we've got great value and the right range for our customers.

Speaker #4: Great. And sorry, should this be a COGS tailwind for '27? I'm sorry. Can you give a comment around—you mentioned before, I'm going back to margin.

Shaun Cousins: Great. Should this be a COGS tailwind for 2027?

Annette Karantoni: Sorry?

Shaun Cousins: I am sorry. Should you get conscious around, you mentioned that I am going back to margin. You said that product margins actually came back a wee bit in 2026. Should we see customer offer reset give you a gross margin benefit in fiscal 2027?

Speaker #4: You said that product margins actually came back a wee bit in '26. Should we see the customer offer reset give you a gross margin benefit in fiscal '27?

Amanda Bardwell: Sean, we are not going to give a forecast on the margin going forward. Just to outline how we are thinking about it more broadly, that is that we are very committed, as you know, to continuing to find ways to buffer customers in terms of price and continuing to make the right investments in price going forward, whilst also looking at the right ways in which we can continue to improve our margins. So that is with better stock loss management, growth in our Cartology and our Everyday Rewards and our services businesses in particular. That is our primary focus. Really want to be focused on making sure that we get that overall offer right and then look for ways in which, yes, we can expand our margin in other ways.

Speaker #1: Sean, we're not going to give a forecast on the margin going forward, but just to outline how we're thinking about it more broadly: we're very committed, as you know, to continuing to find ways to buffer customers in terms of price and to continue making the right investments in price going forward.

Speaker #1: Whilst also looking at the right ways in which we can continue to improve our margins. So, that's with better stock loss management, growth in our cutology and our rewards and services businesses in particular.

Speaker #1: That's our primary focus. We really want to be focused on making sure that we get that overall offer right, and then look for ways in which, yes, we can expand our margin in other ways.

Speaker #2: Thank you. The next question comes from Benjamin Gilbert from Jarden. Please go ahead.

Operator: Thank you. The next question comes from Benjamin Gilbert from Jarden. Please go ahead.

Speaker #4: Morning, Amanda and team. I'm just interested in the strong results you've had through July and August. I've seen the back of Ushies. Just how you've sort of come up with that estimated benefit, but more importantly, where that incremental growth came from.

Ben Gilbert: Morning, Amanda and team. I am just interested in the strong result you have had through July and August of Send Back a Bushie. Just how you have sort of come up that 1.5% to 2% potential estimated benefit. More importantly, where that incremental growth came from. Was it largely new customers? Was it where you were losing items to Chemist Warehouse, et cetera, in the past? I suppose how you are thinking around actually trying to hold onto those customers moving forward. Because it feels like it is a unique opportunity you can really lean in on things like below the line, et cetera, to try and retain those. What are you doing to sort of try to lean into retention to really capitalize on this successful campaign?

Benjamin Gilbert: Morning, Amanda and team. I am just interested in the strong result you have had through July and August of Send Back a Bushie. Just how you have sort of come up that 1.5% to 2% potential estimated benefit. More importantly, where that incremental growth came from. Was it largely new customers? Was it where you were losing items to Chemist Warehouse, et cetera, in the past? I suppose how you are thinking around actually trying to hold onto those customers moving forward. Because it feels like it is a unique opportunity you can really lean in on things like below the line, et cetera, to try and retain those. What are you doing to sort of try to lean into retention to really capitalize on this successful campaign?

Speaker #4: Was it largely new customers? Was it where you were losing items to Chemist Warehouse, et cetera, in the past? And I suppose, how are you thinking around actually trying to hold on to those customers moving forward? Because it feels like some unique opportunity you can really lean in on things like below the line, et cetera, to try and retain those.

Speaker #4: What are you doing to sort of try to lean into retention to really capitalize on this successful campaign?

Speaker #1: Yeah, thanks. Thanks, Ben, for the question. I'll hand to Steve to talk around how we calculated the number, but just to talk to the collectible campaign itself, it did a number of things for us.

Amanda Bardwell: Yeah. Thanks, Ben, for the question. I will hand to Steve to talk around how we calculated the number. Just to talk to the collectible campaign itself, it did a number of things for us. Firstly, we already had a really strong underlying sales and item momentum coming out of the second half in Q4 and then into the early weeks of July. Since the collectible program has finished, that has continued on similarly to the Q4 trajectory that we were seeing. So we are very pleased with that overall. When we look at then the collectible campaign and customer behavior, we certainly saw a number of things. We see a portion of customers who are already shopping with us and might add a few more items to their basket so that they qualify for the Ooshie.

Speaker #1: Firstly, we already had a really strong underlying sales and item momentum coming out of the second half in Q4, and then into the early weeks of July.

Speaker #1: And then, since the collectible program has finished, that's continued on similarly to the Q4 trajectory that we were seeing. So we're very pleased with that overall.

Speaker #1: When we look at the collectibles campaign and customer behavior, we certainly saw a number of things. We see a portion of customers who are already shopping with us and might add a few more items to their baskets so that they qualify for the ushi.

Speaker #1: We also then see some customers who might not have shopped with us for a while come and try us again, and as you say, that's a big opportunity for us as we go forward.

Amanda Bardwell: We also then see some customers who might not have shopped with us for a while, come and try us again, and as you say, that is a big opportunity for us as we go forward. Then you just see some customers who shop more frequently overall. So it is a mix of those three shifts in behavior that we saw. What we are focused on and what we are focused on during the campaign is how do we create the best possible customer experience overall. Great opportunity for us to introduce those customers who might not have seen the improved value that we have on offer, the uplifted experience that we are able to offer across both our stores and e-commerce. Then as we have come out of this phase now, yes, we have been very focused on how do we continue to retain those customers.

Speaker #1: And then you just see some customers who shop more frequently overall. So it is a mix of those three shifts in behavior that we saw.

Speaker #1: What we're focused on, and what we were focused on during the campaign, is how do we create the best possible customer experience overall. It's a great opportunity for us to introduce those customers who might not have seen the improved value that we have on offer, and the uplifted experience that we're able to offer across both our stores and e-commerce.

Speaker #1: And then, as we've come out of this phase now, yes, we've been very focused on how we continue to retain those customers. So Everyday Rewards plays a really important part of that.

Amanda Bardwell: Everyday Rewards plays a really important part of that. We saw really great momentum across the year for Everyday Rewards. Strong boosting engagement up substantially on the year prior, about a 10% increase. So we know that our loyalty customers are really valuing the Everyday Rewards program, and so it creates a great opportunity for us to be able to direct target them now with additional offers and reasons to shop with Woolies. But we also saw e-commerce perform very strongly during this period as well. So again, another great opportunity for us for those connected customers shopping across e-commerce and into our stores to equally be providing more reasons for them to shop at Woolies. But really, from our perspective, the underlying focus here was to make sure that the experience was a good one so that customers would choose us first.

Speaker #1: We saw really great momentum across the year for Everyday Rewards, strongly boosting engagement—up substantially on the year prior, about a 10% increase. And so we know that our loyalty customers are really valuing the Everyday Rewards program.

Speaker #1: And so it creates a great opportunity for us to be able to directly target them now with additional offers and reasons to shop with Woolies.

Speaker #1: But we also saw e-commerce perform very strongly during this period as well. And so again, another great opportunity for us for those connected customers, shopping across e-commerce and into our stores, to equally be providing more reasons for them to shop at Woolies.

Speaker #1: But really, from our perspective, the underlying focus here was to make sure that the experience was a good one, so that customers would choose us first.

Speaker #1: And then, of course, we'll continue to use some of those vehicles that we have, loyalty and promotions, to encourage customers to come back. And so, I'll hand to Steve just to answer that specific question. Yeah.

Amanda Bardwell: We will continue to use some of those vehicles that we have, loyalty, e-commerce, our promotions, to encourage customers to come back. I will hand to Steve just to answer that specific question.

Stephen Harrison: Yes, Ben, we have provided a range because it is an estimate, but the way we have tried to calculate it is we have reasonably stable week-on-week sales at this time of year. We look at what was the sales growth week on week through the promotional period. We also, when we are investing in a customer offer like this, make sure we evaluate both the current and past promotions. We know the estimated uplift we got from the Disney discs that we ran in the first eight weeks last year, and we have compared the uplift we have got from Ooshies and really tried to disclose what we think the incremental sales is based on that evaluation of the program and the sales uplifts relative to our run rates pre and post-program. It is an estimate.

Speaker #2: Ben . I mean , we've provided a range because , you know , it is an estimate , but the way we've tried to calculate it is we have reasonably stable week on week sales at this time of year .

Speaker #2: And so we , we look at what was the sales growth week on week through the promotional period . We also , you know , when we're investing in a customer offer like this , make sure we evaluate the both the current and past promotions .

Speaker #2: So, you know, we know the estimated uplift we got from the Disney discs that we ran in the first eight weeks last year.

Speaker #2: And we've compared the uplift we've got from Ushes and really tried to disclose what we think the incremental sales is based on , you know , that that evaluation of the program and the sales uplifts , you know , relative to our run rates pre and post the program But it is an estimate

Speaker #3: That's really helpful. Thanks, Tim.

Ben Gilbert: That is really helpful. Thanks, Steve.

Benjamin Gilbert: That is really helpful. Thanks, Steve.

Speaker #4: Thank you. The next question comes from Michael Toner from RBC. Please go ahead.

Operator: Thank you. The next question comes from Michael Toner from RBC. Please go ahead.

Speaker #5: Hi , Tim . Thanks for taking my question . Just on the operating CapEx , step up next year , and you've been consistent around that 1.8 to 2 billion operating CapEx .

Michael Toner: Hi, team. Thanks for taking my question. Just on the operating CapEx step-up next year, you have been consistent around that AUD 1.8 billion to AUD 2 billion operating CapEx mark. When is the point at which you think we can expect lower capital intensity from Woolworths Group? Is it after FY28 once those major CFC and Sydney Chilled projects are completed or do you think that circa 3.5% gross CapEx for sales is a good benchmark to assume over the medium term? Thank you.

Speaker #5: Mark , when is the point at which we can you think we can expect lower capital intensity from Woolworths ? Is it sort of after FY 28 once those major CFC and Sydney Shield projects are completed , or do you think that circa 3.5% growth CapEx to sales is a good benchmark to assume over the medium term ?

Speaker #5: Thank you

Speaker #2: Yeah , we've as I said earlier , in dealing with the depreciation question , our capital has sort of been between this 1.85 and $2 billion consistently for the last 4 or 5 years .

Stephen Harrison: Yeah. As I said earlier in dealing with the depreciation question, our capital has been between this AUD 1.85 billion and AUD 2 billion consistently for the last four or five years. We think that that is the right level of capital from an operating perspective to allow us to reinvest back into the business to sustain the asset base, replace either equipment or technology, as well as invest in growth. You did see a slight mix shift in terms of sustaining come down and growth go up in the year just gone. We have also been focusing on how do we drive as much efficiency as we possibly can out of that capital program. In the same way we want to make every dollar count in our OpEx discipline, the same applies in our CapEx.

Speaker #2: You know, we think that that is the right level of capital, from an operating perspective, to allow us to reinvest back into the business to sustain the asset base — you know, replace either equipment or technology — as well as invest in growth.

Speaker #2: And , you know , you did see a slight mix shift in terms of sustaining come down and , and growth go up in , in the , in the year just gone , you know , we've also been focusing on how do we drive as much efficiency as we possibly can out of that , that capital program .

Speaker #2: And so , you know , in the same way we want to make every dollar count in our in our opex discipline , the same applies in our CapEx .

Speaker #2: And so, you know, we've really been very focused on how we make our renewal spend much more efficient, without compromising the quality of the customer offer.

Stephen Harrison: We have really been very focused on how do we make our renewal spend much more efficient without compromising the quality of the customer offer. I think really positive results in that regard in the current year. We are still in the midst of our supply chain capital investment program, though. We would expect ongoing supply chain spend certainly in F27 and continuing to step down a little bit in F28 as we still have our Sydney Chilled and Fresh DC that we are building at the moment, and we have got our Melbourne North automated e-commerce facility that is also due to come online in F28. We do think that that envelope is about right. Sometimes programs are lumpy, just depending on the timing of when they come in.

Speaker #2: And so , you know , I think really positive results in that regard in the current year , we , we are still in the midst of our supply chain capital investment program , though .

Speaker #2: And so , you know , we would expect ongoing supply chain spend , certainly in f 27 . And , you know , continuing to step down a little bit in F 28 as we we still have our Sydney children fresh DC that we're building at the moment .

Speaker #2: And we've got our Melbourne North automated e-commerce facility that is also due to come online in FY28. So we do think that that envelope is about right.

Speaker #2: Sometimes programs are lumpy just depending on the timing of when they come in . But we think that actually , if you look at it , capital has been coming down as to revenue , you know , over over that last 4 or 5 years .

Stephen Harrison: We think that actually if you look at it, capital has been coming down as a percentage of revenue over that last four or five years. We do see good opportunities to reinvest back into the growth of our business that can drive both the top line and the bottom line moving forward.

Speaker #2: But we do see good opportunities to reinvest back into the growth of our business that can drive both the top line and the bottom line going forward.

Speaker #5: Great . Thank .

Michael Toner: Great. Thank you.

Speaker #6: You .

Speaker #4: Thank you. The next question comes from Brian Raymond from JP Morgan. Please go ahead.

Operator: Thank you. The next question comes from Bryan Raymond from JP Morgan. Please go ahead.

Bryan Raymond: Good morning. Mine is on the margin outlook for the Australian Supermarkets business. You guys are talking in your financial aspirations section of the presentation there to have EBIT growth ahead of sales, which obviously implies margin expansion. Going forward, you are currently 22 bps below Coles in FY26. That is obviously not the traditional gap that we observe in the sector, given your scale and procurement advantages. I just wanted to understand some of the levers that you see in 2027 and 2028 without asking for guidance on margin, of course. In terms of restoring that margin leadership, which most of us expect that to occur, and if it is not customer offer reset, in response to Shaun's question, you sort of downplayed the gross margin benefit there. What is the opportunity then to drive better gross margins on a one to two year view? Thanks.

Speaker #7: Morning. My question is on the margin outlook for the Australian supermarkets business. You guys are talking in your financial aspirations section of the presentation there to have EBIT growth ahead of sales, which obviously implies margin expansion going forward.

Speaker #7: You currently 22 Bips below Coles in FY 26 . That's obviously not the not the traditional gap that we that we observe in the sector .

Speaker #7: Given your scale and procurement advantages . So I just wanted to understand sort of some of the levers that you see in 27 and 28 without asking for guidance on margin .

Speaker #7: Of course , but in terms of restoring that margin leadership , which most of us sort of expect that to , to occur .

Speaker #7: And if it's not customer offer reset in response to Sean's question , you sort of downplayed the gross margin benefit there . What is the opportunity then to drive better gross margins on a sort of 1 to 2 year view ?

Speaker #7: Thanks. Or, better yet, EBIT margins, I should say, on a one- to two-year view.

Bryan Raymond: Or better EBIT margins, I should say, on a one to two year view.

Speaker #1: So , so Brian , just to , to clarify , you know , our mid-term aspirations continue to be to deliver mid to upper single digit earnings growth as we , as we move forward .

Amanda Bardwell: Brian, just to clarify, our midterm aspirations continue to be to deliver mid to upper single-digit earning growth as we move forward. As you referenced that slide, I think it is important to put that in context over the long term. When you look at the question in terms of CODB, important just to be clear on the distinction of supply chain. Steve, did you want to just cover that?

Speaker #1: And so as you reference that slide , I think it's important to put that in , in context over over the long term .

Speaker #1: When you look at the question in terms of CODB, it's important just to be clear on the distinction of supply chain. I think, Steve, did you want to just cover that?

Speaker #2: Yes . I think , you know , as you do the comparisons between our margin and competitors , you know , we've disclosed we had 113 million of supply chain commissioning transition and running costs in in those numbers .

Stephen Harrison: Yes. I think, if you do the comparison between our margin and competitors, we have disclosed we had AUD 113 million of supply chain commissioning transition and dual running costs in those numbers. We expect some of those costs to still be in the P&L in 2027 and 2028, but they will come down, and we will start to see benefits in 2027. They won't fully offset those commissioning costs, but there will be a material improvement and then, we should move to a net benefit position in F28. Just in terms of how we think about those one-off or discrete project-related costs impact and their impact on earnings. I think more broadly, ultimately we are trying to drive a sales-driven growth agenda, right? We want to invest in our customer proposition, and value to drive sales.

Speaker #2: Now , we expect to some of those costs to still be in . The PNL in 27 and 28 , but they will come down and we'll start to see benefits in 27 .

Speaker #2: They won't fully offset those those commissioning costs , but there'll be a material improvement . And then , you know , we should move to a net position in F 28 .

Speaker #2: Just in terms of how we think about the those one off or , you know , discrete project related costs impact on and their impact on earnings .

Speaker #2: But I think more broadly , you know , ultimately , we're trying to drive a sales driven growth agenda , right ? So we want to invest in our customer proposition and value to drive sales , you know , by doing that and having a very strong and disciplined focus on cost and productivity , we would expect , sales to grow faster than cost .

Stephen Harrison: By doing that and having a very strong and disciplined focus on cost and productivity, we would expect sales to grow faster than cost and for margins to, or for earnings to therefore grow ahead of sales, which as you point out will lead to, assuming we deliver that, which is our plan, margins to gradually expand.

Speaker #2: And for margins to or for earnings to . Therefore grow ahead of sales , which , you know , as you point out , will will lead to , you know , assuming we deliver that , which is our plan margins to , to gradually expand

Speaker #1: And just to , to build on that , I'd say drawing attention to everyday rewards , our services business , they provide great opportunities for us going forward .

Amanda Bardwell: Just to build on that, I would say drawing attention to Everyday Rewards, our services business, Cartology, they provide great opportunities for us going forward. They are significant contributors to the margin of the food business overall, and we see strong potential for those businesses going forward to contribute to that. Continuing to manage stock loss well is a significant focus and of course, over the medium term, our supply chain investments continuing to deliver improved productivity and margin benefits there as well. If you look at the overall shape of the business, yes, we are very focused on being productive across stores, across our supply chain, and across our support offices. We are also really pleased to see the performance out of our e-commerce business.

Speaker #1: They're significant contributors to the margin of the food business overall . And we see strong potential for those businesses going forward to contribute to contribute to that , continuing to manage stock loss well is a significant focus .

Speaker #1: And of course, over the medium term, our supply chain investments are continuing to deliver improved productivity and margin benefits there as well.

Speaker #1: And then if you look at the overall shape of the business , yes , we're very focused on being productive across stores , across our supply chain and across our support offices , but we're also really pleased to see the performance out of our e-commerce business .

Speaker #1: If you look at the improving profitability , that's coming now from that scale benefit that we have , a lot of the work that's gone in around picking efficiently across our stores , in particular , and then a quite attractive margin mix in terms of the most popular shopping experiences , whether that's direct to boot or on demand , actually also being very strong from a margin contribution perspective .

Amanda Bardwell: If you look at the improving profitability that is coming now from the scale benefit that we have, a lot of the work that has gone in around picking efficiently across our stores in particular, and then a quite attractive margin mix in terms of the most popular shopping experiences, whether that is Direct to boot or On Demand, actually also being very strong from a margin contribution perspective. We do see a lot of opportunity to continue to be able to, in the right way, improve our margin opportunities. But it all does start with us really driving a sales and volume agenda first.

Speaker #1: So we do see a lot of opportunity to continue to be able to, in the right way, improve our margin opportunities. But it all does start with us really driving a sales and volume agenda.

Speaker #1: First .

Speaker #7: Okay . Thank you

Bryan Raymond: Okay. Thank you.

Speaker #4: Thank you. The next question comes from Craig Woolford from T-Marque. Please go ahead.

Operator: Thank you. The next question comes from Craig Woolford from MST Marquee. Please go ahead.

Speaker #8: Good morning, Amanda. I wanted to follow up on that e-commerce comment. If I do the maths, I think the, let's call it, the e-commerce DAP.

Craig Woolford: Good morning, Amanda. I wanted to follow up on that e-commerce comment. If I do the maths, I think the, let us call it the eComX DAP, if that is the right way to do it, looks to be about a 4.1% EBIT margin. So certainly closing in on the broader Australian Food average. Do you expect there to be a further narrowing of that margin differential between e-commerce and the broader food segment? If you can weave into your answer, I am interested in how the different mix of businesses is affecting that, such as On Demand taking a greater share of the sales.

Speaker #8: If that's the right way to do it, it looks to be about a 4.1% exit margin. So, certainly closing in on the broader Australian food average.

Speaker #8: So do you expect there to be a further narrowing of that margin differential between e-commerce and the broader food segment ? And if you can weave into your answer , I'm interested in how the different mix of businesses is affecting that , such as on demand , taking a greater share of the sales

Speaker #1: Yeah . Thanks , Craig , for the for the question . Important . Just to start with , as you know , we think about stores and e-commerce in a connected customer way and with a connected network .

Amanda Bardwell: Yeah. Thanks, Craig, for the question. Important just to start with, as you know, we think about stores and e-commerce in a connected customer way and with a connected network. It is really important as we are looking at the overall performance of the food business that we start with that holistic EBIT number at the total level for Australian Food. DAP is a directly attributable profit figure, and represents both all of the direct costs associated with e-commerce and the variable costs associated. It is not directly comparable to EBIT. However, it is fantastic to see the improving DAP performance across the year, a very strong performance overall. It certainly is something that, as we look forward, we believe we can continue to improve that margin. I am just looking at Amitabh as I say that.

Speaker #1: And so, it's really important as we're looking at the overall performance of the food business that we start with that holistic EBIT number at the total level for Australian Food.

Speaker #1: DAP is a directly attributable profit figure, and represents both all the direct costs associated with e-commerce and the variable costs associated. It's not directly comparable to EBIT.

Speaker #1: However , it is fantastic to see the improving DAP performance across the year . A very strong performance overall , and it certainly is something that , you know , as we look forward , we believe we can continue to improve that margin .

Speaker #1: I'm just looking at Amitabh as I as I say that , do you want to pick up the question from there ? Amitabh just around mix opportunities to continue to improve that e-commerce profitability .

Amanda Bardwell: Do you want to pick up the question from there, Amitabh, just around mix opportunities to continue to improve that e-commerce profitability?

Speaker #1: Sure .

Amitabh Mall: Sure. Happy to do that, Amanda. It is very pleasing to have double the e-commerce profit from last year to this year. As Steve pointed out earlier, some of it is based on the-

Speaker #9: Happy to do that . Look , it's very pleasing to have double the e-commerce profit from last year to this year . And a steep pointed out earlier , some of it is based on the some of the challenges we had in the previous year , but we still believe that some of the underlying drivers and you spoken to all three of them .

Amitabh Mall: Some of the challenges we had in the previous year, but we still believe that some of the underlying drivers, and you have spoken to all three of them, Amanda, are scale, where we are starting to see fractionalization of cost as we grow the business with better flow through from a profit. The mix, and I will come back to that, with a mix both of collections and on-demand, as well as productivity in how we drive discipline and efficiency in our business. All three drivers are actually quite sustainable in continuing to improve profitability of the e-commerce business. One specific one to call out, as you pointed out, Amanda, is the growth of on-demand, where we are now running about 47% of all our deliveries are delivered within two hours.

Speaker #9: Amanda, around scale, where we are starting to see fractionalization of cost as we grow the business, a better flow from a profit.

Speaker #9: The mix and I'll come back to that with a mix of of collections and on demand , as well as productivity in how we drive discipline and efficiency in our business .

Speaker #9: All three drivers are actually quite sustainable in improving , continuing to improve profitability of the e-commerce business . One specific one to call out , as you pointed out , Amanda , is the growth of on demand , where we are now running about 47% of all our deliveries are delivered within two hours , and it's important to point out that within two hours , part of it , because a few years ago , we used to talk quite a bit about our same day mix of the business , but frankly , customers have moved on .

Amitabh Mall: It is important to point out the within 2 hours part of it, because a few years ago, we used to talk quite a bit about our same-day mix of the business. Frankly, customers have moved on. They want it quicker. They want it now. Over the years, the investments we have made in our store network and our Direct to boot base allows us to continue to drive on-demand at a pace which is quite differentiated in the market, and we hope will continue to improve and drive our profitability.

Speaker #9: They want it quicker, they want it now. And over the years, the investments we've made in our store network and our direct boot base allow us to continue to drive on-demand at a pace which is quite differentiated in the market.

Speaker #9: And we hope will continue to improve and drive our profitability.

Speaker #1: Thank .

Speaker #9: You

Speaker #4: Thank you. The next question comes from Phil Kimber from E&P Capital. Please go ahead.

Amanda Bardwell: Thank you.

Operator: Thank you. The next question comes from Phil Kimber from E&P Capital. Please go ahead.

Speaker #8: Hi, guys. I just had a question on the store network. You guys have done a great job in regaining momentum and building that momentum.

Phil Kimber: Hi, guys. I just had a question on the store network. You guys have done a great job in regaining momentum and building that momentum. The store renewals, I think, were 66 in the year, if I am reading it right up the back of the release. That seems quite low for a thousand-store plus chain. Is that the next evolution that is coming that there will be a greater ramp-up of the renewals in the Australian Food business? Thank you.

Speaker #8: But you know , the store renewals I think were 66 in the year . If I'm reading it right up the back of the of the release that that seems quite low for a thousand store plus chain , is that sort of the next evolution that's coming that , you know , there will be a , a greater ramp up of the renewals in the Australian food business .

Speaker #8: Thank you .

Speaker #1: Thanks , Phil , for the for the question . Yeah , it's around 67 or so renewals across the year , which is broadly in line with what we've been doing over the last couple of couple of years .

Amanda Bardwell: Thanks, Phil, for the question. Yeah. Around 67 or so renewals across the year, which is broadly in line with what we have been doing over the last couple of years. As you know, we have had a very strong program of consistently renewing our network for a decade, and critical that we continue to do so, and it is our intention to continue that going forward along similar levels. That actually has created for us great growth. As we renew each and every one of those stores, we take the opportunity not just to improve the experience, of course, for our in-store customers and make the role of our store teams easier, but we have also been reshaping our stores so that they can better service e-commerce.

Speaker #1: As you know, we've had a very strong program of consistently renewing our network for the last decade, and it's critical that we continue to do so.

Speaker #1: And it's our intention to continue that going forward . Along similar levels that actually has created for us great growth as we renew each and each and every one of those stores , we take the opportunity not just to improve the experience , of course , for our in store customers and make the role of our store teams easier .

Speaker #1: But we've also been reshaping our stores so that they can better service e-commerce . And so whether that's adding the direct to boots of which we have well over 700 now , whether that's configuring some of our back of house space so that we can more efficiently fulfill e-commerce .

Amanda Bardwell: Whether that is adding the Direct to boot, of which we have well over 700 now, whether that is reconfiguring some of our back-of-house space so that we can more efficiently fulfill e-commerce, all of that has been happening for many, many years now, which is why we think we are well set up with that focus we have had on speed to customer for e-commerce to be able to service now the demand that Amitai has just talked to. I will hand to Steve if there is any other comments you might want to make on store network.

Speaker #1: All of that has been happening for many, many years now, which is why we think we're well set up with that focus.

Speaker #1: We've had on speed to customer for e-commerce to be able to service . Now , the demand that Amitabh's just , just talked to , I'll hand to Steve if there's any other comments you might want to make on on store network .

Speaker #2: Yeah , I think a couple of comments in , in that renewal number , we disclosed in the appendix . It's full store renewal .

Stephen Harrison: Yeah. I think a couple of comments. In that renewal number we disclose in the appendix, it is full store renewal. So we will also run an e-com renewal program where we are adding Direct to boot and improving the capacity and space for e-commerce, which we do not specifically classify in those numbers. So we are not only touching those stores, we are touching actually a larger portion of them to really drive the growth component. I think moving forward, really our goal is in a 65 to 80 a year. Obviously, it depends on the timing of approvals, capacity of the team. So it is a range and not necessarily a definitive number every year. We look at it in terms of our capital prioritization each year. I think probably the other thing to comment on is just new store growth.

Speaker #2: So we will also run an e-com renewal program where we're adding direct-to-boots and improving the capacity and space for e-commerce, which we don't specifically classify in those numbers.

Speaker #2: So it's we're not only touching those stores , we're touching actually a larger portion of them to really drive the growth component . I think moving forward , really our , our sort of goal is in that 65 to 80 a year .

Speaker #2: It depends on the timing of approvals, the capacity of the team, and so it is a range and not necessarily a definitive number.

Speaker #2: Every year, we look at it in terms of our capital prioritization—each year. And I think probably the other thing to comment on is just new growth.

Speaker #2: You know , we opened 17 new supermarkets in Australia in , in the year just gone over the next 4 to 5 years , we'd actually anticipate on average opening between 20 and 25 a year .

Stephen Harrison: We opened 17 new supermarkets in Australia in the year just gone. Over the next four to five years, we would actually anticipate on average opening between 20 and 25 a year. The pipeline the last five years probably been just around, I think, 88 or 90 over the last five years. It has been a bit slower coming out of COVID, and with both interest rates and construction costs, the developer market has been a little bit slower than we would like, and we are really starting to lean in and leverage our capability of Fabcot to open more centers. So you would have seen a step-up in our property development capital in the last year in our CapEx. That is really about ensuring we have got a really strong new store pipeline for the next five and 10 years.

Speaker #2: We , you know , the , the pipeline , the last five years , probably been just around , I think , 88 or 90 over the last five years , it's been a bit slower .

Speaker #2: You know, coming out of COVID and with both interest rates and construction costs, you know, the developer market has been a little bit slower than we would like.

Speaker #2: And we're really starting to lean in and leverage our capability of fabricut to open more centres . And so you would have seen a step up in our property development capital in the last in the last year in our CapEx .

Speaker #2: That's really about ensuring we've got a really strong new store pipeline for the next, you know, five and ten years.

Speaker #8: Great. Thanks, guys.

Phil Kimber: Great. Thanks, guys.

Speaker #4: Thank you. The next question comes from Caleb Wheatley from Macquarie. Please go ahead.

Operator: Thank you. The next question comes from Caleb Wheatley from Macquarie. Please go ahead.

Speaker #10: Morning, Amanda and Steve. Just wanted to get your thoughts on how you're thinking about current value perception in Australian Food—just combining a few of the comments around core that you've already made from prior questions.

Caleb Wheatley: Morning, Amanda and Steve. Just keen to get your thoughts on how you are thinking about current value perception in Australian Food. Just combining a few of the comments around CODB that you have already made in prior questions, it sounds like value is still a very, very big focus, and also noting the news earlier this week around 100 or so SKUs being added to the lower shelf price program. How much further do you think you have to go in terms of building that customer price trust, and then any other meaningful opportunities kind of outside of value that you are really thinking about to drive underlying sales and repeat presentations, please?

Speaker #10: Just like value is still a very, very big focus. And also, noting the news earlier this week around the 100 or so SKUs being added to lower the lower shelf price program, how much further do you think you have to go in terms of sort of building that customer price trust? And then, any other meaningful opportunities kind of outside of value that you're really thinking about to drive underlying sales and repeat visitation?

Speaker #10: Please ?

Speaker #1: Yeah. Thanks, Caleb, for the question. So, we're pleased with the progress that we've made across the year in terms of value perceptions.

Amanda Bardwell: Yeah. Thanks, Caleb, for the question. We are pleased with the progress that we have made across the year in terms of value perceptions, and we measure that in a number of different ways, of course. Looking at our voice of customer scores at an advocacy level or our value for money score in particular has improved by 3 points across the year. I think important to put that improvement in the context of the pressure that customers are experiencing as well. We are pleased that the investments that we have been making in lower shelf price, in providing great promotions and great value from our loyalty program, has contributed to an improved value perception.

Speaker #1: And we measure that in a number of different ways. Of course, looking at our Voice of Customer scores at an advocacy level, or our Value for Money score in particular, has improved by three points across the year.

Speaker #1: And I think it's important to put that improvement in the context of the pressure that customers are experiencing as well. So we're pleased that the investments that we've been making in lower shelf prices, in providing great promotions, and great value from our loyalty program have contributed to an improved value perception.

Speaker #1: It's going to be important going forward because, whilst customers continue to be under extreme pressure when it comes to their household budgets, we know that what we continue to hear from them is they're looking for more value, and they've become savvier over the last three years in finding value.

Amanda Bardwell: It's going to be important going forward because whilst customers continue to be under extreme pressure when it comes to their household budgets, we know that what we continue to hear from them is they're looking for more value. They've become savvier over the last three years in finding value. We're focused on listening to the feedback they've provided, which is low and dependable prices, great specials on the things and the favorites that I love, and loyalty that rewards my shopping is what we're focused on providing. I'll pass to Annette to just provide a little bit more color on some of the things that we have been doing in terms of driving that value perception. We still continue to be focused on improving it. We've made progress, but we've still got more ways to go.

Speaker #1: And so we're focused on listening to the feedback they've provided, which is low and dependable prices, great specials on the things and the favorites that I love, and loyalty that rewards my shopping is what we're focused on.

Speaker #1: On providing, I'll pass to Annette to provide a little bit more color on some of the things that we have been doing in terms of driving that value perception.

Speaker #1: We still continue to be focused on improving it . So we've made progress , but we've still got more ways to go . And in particular , when we think about the number of choices customers have as to where they shop .

Amanda Bardwell: In particular, when we think about the number of choices customers have as to where they shop.

Annette Karantoni: Thanks, Amanda. I think absolutely, I'll start with lower shelf prices. Yes, we've added those 100 extra products now, over 1,000 products on lower shelf prices. Given that's now well over 12 months into running lower shelf prices, to still see those products in double-digit unit growth is very, very pleasing and is a signal from our customers that they really do value that everyday low and dependable prices. It's continuing to be a great focus. We're also seeing other trends. We have talked before about customers seeking value through, whether that's using the Everyday Rewards, the app, shopping lists. They're really managing their budgets in very different ways. Bulk products is another example of that. We've seen in some categories like toilet paper and laundry liquids, where we've worked really well with supplier partners to make sure we're bringing those great products and prices to customers.

Speaker #1: Thanks , Amanda , I think . Absolutely . And I'll start with lower shelf prices . Yes , we've added those 100 extra products now over a .

Speaker #1: Thousand products on , on , on lower shelf prices and , and given that's now well over 12 months into running lower shelf prices to still see those products in double digit unit growth is , is very , very pleasing and is a , is a signal from our customers that they really do value that every day .

Speaker #1: Low and dependable prices . So it's continuing to be a great focus . We're also seeing other trends . You know , we have talked before about customers seeking value through whether that's using the everyday rewards .

Speaker #1: The app shopping lists , they're really managing their budgets in very different ways . Bulk products is another example of that . We've seen in some categories , like toilet paper and laundry liquids , where we've worked really , really well with supplier partners to make sure we're bringing those great products and prices to , to customers .

Speaker #1: We're seeing the larger pack sizes really deliver strong unit growth . So in categories like those where the smaller pack sizes might be in high single digit growth , the larger pack sizes are certainly in double digit growth .

Annette Karantoni: We're seeing the larger pack sizes really deliver strong unit growth. In categories like those where the smaller pack sizes might be in high single-digit growth, the larger pack sizes are certainly in double-digit growth. We are seeing customers just shop very differently in many ways. Own brand, of course, continues to be a really strong growth for us at 5.5%. I think some really good signals from customers that the things that we're focusing on, they really value.

Speaker #1: And so, we are seeing customers just shop very differently in many ways, and own brand, of course, continues to be a really strong growth for us at 5.5%.

Speaker #1: So I think some really good signals from customers are that the things we're focusing on, they really value.

Speaker #10: That's very helpful. Thank you.

Caleb Wheatley: That is very helpful. Thank you.

Speaker #4: Thank you. The next question comes from Ollie Ridge from Citi. Please go ahead.

Operator: Thank you. The next question comes from Ollie Ridge from Citi. Please go ahead.

Speaker #11: Apologies, this is a mistake. I didn't—I didn't press the button.

Ollie Ridge: Apologies. This is a mistake. I did not press the button.

Speaker #4: Thank you. We'll move on to the next question. It's from Richard Barwick from CLSA. Please go ahead.

Operator: Thank you. We will move on to the next question. It is from Richard Barwick from CLSA. Please go ahead.

Speaker #12: Hi guys . I've got a quick question on New Zealand . If the first half looked to be sort of two steps forward , but this second half was definitely one step back with with earnings actually going backwards again .

Richard Barwick: Hi guys. I have got a quick question on New Zealand. If the H1 looked to be sort of two steps forward, this H2 was definitely one step back with earnings actually going backwards again. I know that you have referenced subdued trading conditions in your outlook, Amanda Bardwell, how should we be thinking about New Zealand? Is it realistic to expect that it can actually deliver earnings growth again for the full year 2027?

Speaker #12: So I know that you've referenced subdued trading conditions in your outlook, Amanda. But is it real? How should we be thinking about New Zealand?

Speaker #12: Is it realistic to expect that it can actually deliver earnings growth again for the full year '27?

Speaker #1: Yeah. Thanks, Richard.

Amanda Bardwell: Yeah. Thanks, Richard Barwick, for the question. In the H2, there is really two drivers of that softening performance. Certainly, the customers continuing to be under extreme pressure in New Zealand, actually even more than the Australian customer. Kiwis are doing it a lot tougher, particularly in the North Island and Auckland in particular, and we certainly saw that flow through. It is a hyper-competitive market, as you know. Then we had our new operating model in stores roll out in the early part of H2, and that we did have some challenges that caused a disruption that meant we had availability challenges and some customer experience challenges as well. Pleasingly, that performance has improved both in terms of the underlying operating metrics of the business, but also in our customer scores.

Speaker #13: For the question—so in the second half, there are really two drivers of that softening performance. Certainly, our customers are continuing to be under extreme pressure in New Zealand.

Speaker #13: Actually even more than the Australian customer . Kiwis are doing it a lot tougher , particularly in the North Island . And Auckland in particular .

Speaker #13: And we certainly saw that flow through . Its a hyper competitive market as as you know , and then we had our new operating model in stores roll out in the early part of H two , and we did have some challenges .

Speaker #13: It caused a disruption that meant we had availability challenges and some customer experience challenges as well . Pleasingly , that performance has improved both in terms of the underlying operating metrics of of the business , but also in our customer scores .

Speaker #13: But as we look forward, we're just very cautious about where the customer is at and the level of competition that exists there. And so, whilst of course we're focused on improving the performance and the earnings out of the New Zealand business, our first and foremost focus is on sales momentum.

Amanda Bardwell: But as we look forward, we are just very cautious about where the customer is at, the level of competition that exists there. Whilst of course we are focused on improving the performance and the earnings out of the New Zealand business, our first and foremost focus is on sales momentum. I might just hand to Sally Copland just to talk a little around what we are doing on the sales momentum front. That is critically important for us for the period ahead.

Speaker #13: I might just hand to Sally , just to talk a little around what we're doing on the sales momentum front . That's critically important for us for the for the period ahead .

Speaker #13: Yeah . Thank you . Amanda . And I think I just would also reiterate what you said earlier at the beginning . I think we're it was a very tough half for us as a team and implementing that operating model change .

Sally Copland: Yeah. Thank you, Amanda Bardwell. I think I just would also reiterate what you said earlier, at the beginning. I think it was a very tough half for us as a team and implementing that operating model change, and really driving strong recovery across all of those customer availability scores, e-com experience. Actually, we are confident, I think in delivering an improved customer and team experience on the go forward. I think you have spoken to the flight to value for a New Zealand customer, still 75% are cross-shopping up to five banners a month. So a lot of effort going into the customers. We really need to be focused on making sure we are providing them great value and range. We have sharpened up our execution on our customer plan, been invested in value. Some of that has been in our member price.

Speaker #13: And really driving strong recovery across all of those customer availability scores , e-com experience , and actually , you know , we are confident , I think , in delivering a improved customer and team experience on the go forward .

Speaker #13: I think you've spoken to the flight to value for a New Zealand customer. Still, 75% are cross-shopping, up to five banners a month.

Speaker #13: So, a lot of effort is going into the customers, and so we really need to be focused on making sure we are providing them great value.

Speaker #13: And range. And so we've sharpened up our execution on our customer plan, been invested in value. So some of that's been in our member price.

Speaker #13: So we delivered over 1500 member prices . We've had stronger trade activation across half price weeks . We have held back actually from passing off on some cost price increases and key categories like meat for our customers .

Sally Copland: We delivered over 1,500 member prices. We have had stronger trade activation across half price week. We have held back from passing on some cost price increases in key categories like meat for our customers, and then really driving more value. Some of the things we have launched a bulk meat value range, market buy produce.

Speaker #13: And then really driving more value . So some of the things we've launched a bulk meat value range market by produce bulk potatoes , onions , fruit , really the things that Kiwi customers are looking for and they're shopping right now and being focused on that value .

Sally Copland: Bulk potatoes, onions, fruit, really the things that Kiwi customers are looking for in their shopping right now and being focused on that value. I think, in the same vein, we really want to continue providing market-leading convenience. That has been something that we have had leadership in the market for a long time, and then investing in a more rewarding Everyday Rewards program. Again, more value to our members when they are shopping in our stores.

Speaker #13: And I think in the same vein, we really want to continue providing market-leading convenience. That has been something that we have had leadership in, in the market, for a long time.

Speaker #13: And then investing in a more rewarding everyday program. So again, more value to our members when they are shopping in our stores.

Richard Barwick: Okay. Thank you. Can I just clarify a couple of points there? Obviously very focused on value, delivering that message loud and clear, and therefore trying to deliver that value and drive sales momentum. Amanda Bardwell, if you talked about that operating model implementation, those issues, are they behind you now? If that was a drag on the GP, is at least that element in the rear-view mirror yet?

Speaker #12: Okay, thank you. Can I just clarify a couple of points there? So, obviously, we're very focused on value and delivering that message loud and clear.

Speaker #12: And so therefore trying to deliver that value and drive sales momentum , but Amanda , if you talked about that operating model implementation , those issues , are they behind you now ?

Speaker #12: So, if that was a drag on the GP, is at least that element sort of in the rearview mirror yet?

Speaker #12: Yeah .

Speaker #13: We're very .

Amanda Bardwell: We are very pleased with the performance we have now seen out of the operating model in terms of its contribution. We are now looking at the contribution from those changes flowing through in the way in which we expected. What we are just calling out here is, yes, a strong cautiousness around the market in New Zealand. We absolutely want to deliver and need to deliver improved earnings performance. We are very clear on that. To do that effectively and sustainably over the long term, we do need to get that sales momentum driving forward, and that is why we talked more to value. There is more to do in New Zealand, certainly, and that is our focus.

Speaker #1: Pleased actually .

Speaker #13: With the performance . We've now seen out of the operating model . And said that it's contribution . So we're now looking at the contribution from those changes flowing through in the way in which we expected what we're just calling out here is , yes , a strong cautiousness around the market in New Zealand .

Speaker #13: We absolutely want to deliver a need to deliver improved earnings performance . We're very clear on clear on that . To do that effectively and sustainably over the long term , we do need to get that sales momentum driving forward .

Speaker #13: And so that's why we talked more to value. So there's more to do in New Zealand, certainly, and that's our focus.

Speaker #4: Thank you. The next question is a follow-up from Adrian from Citi. Please go ahead.

Operator: Thank you. The next question is a follow-up from Adrian Lemme from Citi. Please go ahead.

Speaker #14: Thanks for a quick follow up questions for Steve and this this may be premature , but I noticed you've had a pretty material reduction in gearing to two and a half times , and you've noted a pretty substantial franking credit balance .

Adrian Lemme: Thanks for a quick follow-up. Questions for Steve, and this may be premature, but I noticed you have had a pretty material reduction in gearing 2.5 times, and you have noted a pretty substantial franking credit balance. Do you see that you have excess capital at these levels of gearing? If not, where do you need gearing to get to, please?

Speaker #14: Do you see that you have excess capital at these levels of gearing? And if not, where do you need gearing to get to?

Speaker #14: Please ?

Speaker #2: Yeah . Thanks for the question , Adrian . Look , I think I would say we're very happy with actually the cash generation in the year , just under $350 million of positive cash generation .

Stephen Harrison: Well, thanks for the question, Adrian. Look, I think I would say we are very happy with actually the cash generation in the year. Just under AUD 350 million of positive cash generation, and that has seen our leverage get down to 2.5 times, which is sort of towards the lower end of our thresholds. Actually, we are also pleased to see that 15.5% increase in the dividend in line with the impact growth. Just the one thing we are conscious of is not in the leverage metric, but we do sit on a relatively material provision for salary team member remediation. At a point in time, once the legal proceedings are settled, that will need to be cash settled and paid.

Speaker #2: And that has seen our leverage get down to 2.5 times, which is sort of towards the lower end of our thresholds. And actually, we're also pleased to see that 15.5% increase in the dividend, in line with the impact growth.

Speaker #2: Just the one thing we're we're conscious of , it's not in the leverage metric , but we do sit on a relatively relatively material provision for salaried team member remediation .

Speaker #2: And so, at a point in time, once the legal proceedings are settled, that will need to be cash settled and paid.

Speaker #2: But we are always looking at our balance sheet settings to say , well , you know , if we have surplus capital , what is the best way to deploy it ?

Stephen Harrison: We are always looking at our balance sheet settings to say, "Well, if we have surplus capital, what is the best way to deploy it? Is it to reinvest it back into business to drive growth, or is it to return it to shareholders?" That is something that we will continue to evaluate.

Speaker #2: Is it to reinvest it back into the business to drive growth? Or is it to return to shareholders? And that's something that we'll continue to evaluate.

Speaker #14: That's helpful. Thanks, Steve.

Adrian Lemme: That is helpful. Thanks, Steve.

Speaker #4: Thank you. The next question is a follow-up from Peter Marks at Goldman Sachs. Please go ahead.

Operator: Thank you. The next question is a follow-up from Peter Marks from Goldman Sachs. Please go ahead.

Speaker #15: Oh , thanks , guys . It's actually a related one for Steve . Just net interest was a bit better in the second half .

Peter Marks: Thanks, guys. It is actually a related one for Steve. Net interest was a bit better in H2. At least that is what I was expecting. It looked like lease interest declined in FY26. How should we think about the net interest outlook into 2027, and can you just talk through some of the drivers there in H2?

Speaker #15: At least that's what I was expecting . It looked like lease interest declined in FY 26 . How should we think about the net interest outlook into into 27 .

Speaker #15: And can you just talk through some of the drivers there in the second half?

Speaker #2: Yeah . So you've seen just that that lease liability just gradually ticked down as we've been focused on really shortening the whale . And so you'll look if you look in the financial statements , you'll see reduction of lease terms as we're looking for shorter leases , but actually still with plenty of tenure in the option period .

Stephen Harrison: Yeah. So you have seen just that lease liability just gradually tick down as we have been focused on really shortening the whale. If you look in the financial statements, you will see reduction of lease terms as we are looking for shorter leases. But actually still with plenty of tenure in the option period, so we have got security of the store footprint. So that is driving some of the lease interest reduction. We finished the year with slightly lower net debt, but actually across the year, you have seen interest rates increase modestly, and so we tend to have a hedged book of both fixed and variable interest-bearing debt. I think a couple of things, just depends on where the interest rate outlook goes as to what impact it has.

Speaker #2: So we've got security of of the , the store footprint . And so that's driving some of the lease interest reductions . You know , we finished the year with slightly lower net debt , but actually across the year , you've seen interest increase in interest rates increase modestly .

Speaker #2: And so we tend to have a , you know , a hedged book of both fixed and variable interest bearing debt . I think a couple of things just depends on where the interest outlook , interest rate outlook goes as to what impact it has .

Speaker #2: You may have noticed in our disclosures, we have booked a $20 million interest cost in the second half associated with the interest that accrues on that payroll remediation.

Stephen Harrison: You may have noticed in our disclosures, we have booked a AUD 20 million interest cost in the H2 associated with the interest that accrues on that payroll remediation, so that will continue to be at around that level until that is resolved. I think just the other element is we have had a With the construction of the Moorebank RDC over a number of years, there has been relatively high lease interest capitalization into those projects, which we would expect to step down. So there is probably signals of a modest increase in interest in F27, but one that we are just working through.

Speaker #2: So that will continue to be at around that level until that is resolved . And I think just the other element is we we have had a with the construction of the Moorebank DC over a number of years , that has been relatively high leasing interest capitalisation into those projects , which we would expect to step down .

Speaker #2: You know , there's probably a signals of an increase in a modest increase in interest in F 27 . But one that we're just working through .

Speaker #15: Very helpful. Thanks, Steve.

Peter Marks: Very helpful. Thanks, Steve.

Speaker #4: Thank you. The next question is a follow-up from Michael Toner from RBC. Please go ahead.

Operator: Thank you. The next question is a follow-up from Michael Toner from RBC. Please go ahead.

Speaker #5: Oh , hi , Tim . Thanks for taking my follow up . Just on inflation and noting the July numbers just come out half an hour ago .

Michael Toner: Oh, hi, team. Thanks for taking my follow-up. Just on inflation and noting the July numbers come out half an hour ago, it looks like red meat and milk are up again sequentially versus June, which I guess is what you would expect. I am curious as to what you are seeing with customer pricing increase requests coming through to August. Do you think you have a sense on when this ends or will not keep getting worse month-to-month, at least? Thank you.

Speaker #5: It looks like red, red meat and milk are up again sequentially versus June, which I guess is what you'd expect. But I'm curious as to what you're seeing with customer pricing requests coming through to August.

Speaker #5: And do you think you have a sense of when this ends, or if it won't keep getting worse month to month, at least?

Speaker #5: Thank you .

Speaker #13: Yeah . Thanks , Michael , for the question . I'll kick off and then I'll hand to Annette for additional colour , particularly on on meat .

Amanda Bardwell: Yeah. Thanks, Michael, for the question. I will kick off and then hand to Annette for additional color, particularly on meat. When we were talking with you in Q3, as you know, we were in the midst of the Middle East conflict having just kicked off. At that time, we were hearing from our supply partners, certainly that we would be seeing a substantial uptick in the number of price request increases, but also the quantum. What has actually played out as we have reached into May and June, we have reverted back actually to the level of price increase requests that we had on average been receiving across the 12 months. Whilst there was that peak moment, it has not sustained. We are really seeing both at a quantum and actually at a AUD ask level, very similar levels of price increase requests across that 12-month period.

Speaker #13: So when we were talking with you in quarter three , as you know , we were in the midst of the Middle East conflict , having just kicked off .

Speaker #13: And at that time we were hearing from our supply partners , certainly that we would be seeing a substantial uptick in the number of price request increases , but also the quantum what's actually played out as as we've reached into May and June , we have reverted back , back actually to the level of price increase requests that we'd , on average been receiving across the 12 months .

Speaker #13: And so whilst there was that peak moment , it hasn't sustained . And so we're really seeing both at a quantum and actually at a dollar ask level , very similar levels of price increase requests across that 12 month period .

Speaker #13: And that's continued on average through into the start of this financial year. But then within that, as always, there is some balance, and red meat and lamb pricing continues to be a challenge.

Amanda Bardwell: That has continued on average through into the start of this financial year. But then within that, as always, there is some balance in red meat and lamb pricing continues to be a challenge, Annette, alongside dairy as well. You might want to add some detail there.

Speaker #13: Annette alongside dairy as well. So you might just want to add some detail there.

Speaker #1: Yes , certainly . So those those are peak requests in that Q3 really did did come off and moderate fairly soon after that , we spoke about this last time .

Annette Karantoni: Yes, certainly. Those peak requests in that Q3 really did come off and moderate fairly soon after that. We spoke about this last time, and as you said, Amanda, category and commodity specific is what we are now seeing. Meat has been in some levels of inflation for quite some time, certainly the whole way through F26, just broadly. Within red meat, both beef and lamb, we have seen a little bit of relief on mince and trim prices just with what is happening in the global market and the export market. But broadly, the net impact is still an increase. As you say, in chiller, that is partly driven by input costs, but also driven by demand of customers in high protein categories, as we talk about often in cottage cheese, yogurts, and in that red meat category, we have still seen that inflated.

Speaker #1: And as you said , Amanda category and commodity specific is what we're now seeing . And so , I mean , it's been in , in some levels of inflation for quite some time .

Speaker #1: Certainly the whole way through F 26 , just broadly . And then within , within red meat , both , both beef and lamb , we have seen a little bit of relief on , on mince and trim prices just with what's happening in the global market and the export market .

Speaker #1: But , but broadly , the net impact is still an increase . And as you say in chiller , and that's partly driven by by input costs , but also driven by demand of customers in high protein categories .

Speaker #1: As we talk about often, in cottage cheese, yoghurts, and in that red meat category, we have still seen that inflated.

Speaker #1: But as I said , a lot at the moment is driven by input costs . So it's electricity packaging and fuel . It's not driven as much as we had anticipated by by the impact of the war in Iran .

Annette Karantoni: But as I said, a lot at the moment is driven by input costs, so it is electricity, packaging, and fuel. It is not driven as much as we had anticipated by the impact of the war in Iran.

Speaker #6: Great . Thank you

Amanda Bardwell: Great. Thank you.

Michael Toner: Great. Thank you.

Speaker #4: Thank you . The next question is a follow up from Craig Woolford from MSD marquee . Please go ahead Oh , thanks .

Operator: Thank you. The next question is a follow-up from Craig Woolford from MST Marquee. Please go ahead.

Craig Woolford: Oh, thanks. Thanks, Amanda. Just a quick follow-up on inventory. Maybe it is for Stephen, just the inventory outlook. I am interested in structurally whether the customer offer reset program will have any benefits to inventory levels and how you see the working capital and inventory outlook, given what was concerns around Middle East and seems less concerns now.

Speaker #16: Thanks , Matt . Just a quick follow up on inventory . Maybe it's Steven , just the inventory outlook . I'm interested in structurally , whether the customer offer reset program will have any benefits to inventory levels and how you see the , the working capital and inventory outlook , given what was concerns around Middle East and seems less concerned now

Speaker #2: Yeah . Thanks , Craig . In both Australian food and New Zealand food in really late Q3 early Q4 , we made some conscious choices to hold more inventory and that was in in light of the potential risk associated with supply chain disruptions , particularly on some things that we're importing from that side of the world .

Stephen Harrison: Yeah, thanks, Craig. In both Australian Food and Woolworths New Zealand in really late Q3, early Q4, we made some conscious choices to hold more inventory. That was in light of the potential risk associated with supply chain disruptions, particularly on some things that we are importing from that side of the world. The other thing we have consciously done is hold more inventory of our faster turning lines. Really, that availability focus that we would have talked to you about probably in Q2. We are focused on saying, "Actually, do we need to hold more lines of those promotional lines?" So they would be lines, the ones that are driving a lot of sales. So, we have held more inventory in that space consciously. Now, both of these things, depending on the supply mix, do not necessarily need to be unfavorable from a working capital perspective.

Speaker #2: The other thing we have consciously done is hold more inventory of our faster-turning lines. Really, that availability focus that we would have talked to you about probably in Q2.

Speaker #2: We focused on saying , actually , do we need to hold more lines of those promotional lines , those AB lines , the ones that are , you know , driving a lot of sales .

Speaker #2: And so , you know , we've held more inventory in that space consciously . Now , both of these things , depending on , you know , the supply mix , don't necessarily need to be unfavourable from a working capital perspective .

Speaker #2: If you look at our averages , you know , we're about 30 days average on inventory versus over 40 on payable days . And so , you know , we'll always look at this from a , what's the right thing to do for supply certainty and driving sales .

Stephen Harrison: If you look at our averages, we are about 30 days average on inventory versus over 40 on payable days. We will always look at this from a what is the right thing to do for supply certainty and driving sales, and also managing the working capital situation. But we feel like there are always opportunities, and we are always looking closely at inventory management. But we feel comfortable with working capital position. I think probably the other thing we would be remiss not to say is, the inventory management in BIG W is a real improvement in F26. As the team focused on stock flow and clearance, we ended the year actually with much healthier inventory in F26 than the prior year.

Speaker #2: And also managing the working capital situation . But , you know , we feel like , you know , there are always opportunities and we're always looking closely at inventory management , but , but we feel comfortable with working capital position .

Speaker #2: I think probably the other thing I'd be remiss not to say is the inventory management in BIG W is a real improvement in FY26.

Speaker #2: And so , you know , as the team focused on stock flow and clearance , we ended the year actually with much healthier inventory in F 26 than the prior year .

Speaker #16: And we'll cut them off at reset. Have any impact?

Craig Woolford: Will customer offer reset have any impact?

Speaker #2: Not that I'm aware of; nothing material.

Stephen Harrison: Not that I am aware of. Nothing material.

Speaker #4: Thank you. The next question is a follow-up from Brian Raymond from JP Morgan. Please go ahead.

Operator: Thank you. The next question is a follow-up from Bryan Raymond from JP Morgan. Please go ahead.

Speaker #7: Oh , thanks for taking the follow up ones on tobacco . It's obviously back into growth for you guys as it was both your trading update was was in line including and excluding tobacco .

Bryan Raymond: Thanks for taking the follow-up. Mine's on tobacco. It's obviously back into growth for you guys as it was both your trading update was in line, including and excluding tobacco. Just wanting to. There's a lot of press around a material cut to the excise from some. Keen to understand how you see the outlook for tobacco and how that might have to play out from a, I know it's a small part of sales currently, but if we do get a meaningful cut in the excise, that could have a quite a significant impact essentially. Any thoughts around that would be helpful. Thanks.

Speaker #7: So just wanting to and there's a lot of press around a material cut to the excise from from some keen to understand how you see the outlook for tobacco and how that might play out from a .

Speaker #7: I know it's a small part of sales currently, but if we do get a meaningful cut in the excise, that could have quite a significant impact, potentially.

Speaker #7: So yeah . Any thoughts around that would be would be helpful . Thanks .

Speaker #13: Yeah . Thanks . Thanks , Brian . So as you say , across the year , we saw a moderating reduction , if you will .

Amanda Bardwell: Yeah, thanks, Bryan. As you say, across the year, we saw a moderating reduction, if you will. It still had a very big impact on our earnings performance overall. I'd be remiss not to call that out, but certainly as we cycled across the year and came into Q2, the reduction, if you will, in sales moderated. As we've come into now the new financial year period, you would call it broadly flat, fairly consistent AUD each and every week that we're seeing. As we look at it, though, it's actually also really important to have a look at the state-based performance because it's not consistent. If you look at Queensland, for example, where there's a stronger enforcement focus, actually, we do see a slightly higher level of sales flowing through year on year there compared to other parts of the country.

Speaker #13: It's still at a very big impact on our earnings performance overall . And so I'd be remiss not to not to call that out , but certainly as we cycled across the year and came in to the second quarter , the the reduction , if you in sales moderated .

Speaker #13: And as we've come into now , this new financial year period , you know , you would call it broadly flat , fairly consistent dollars each and every week that we're seeing .

Speaker #13: As we look at it, though, it's actually also really important to have a look at the state-based performance because it's not consistent.

Speaker #13: So, if you look at Queensland, for example, where there's a stronger enforcement focus, actually we do see a slightly higher level of sales flowing through year on year.

Speaker #13: They're compared to other parts of the country. But again, as we've seen all the way through the last couple of years, it's actually quite volatile and very different by state.

Amanda Bardwell: But again, as we've seen all the way through the last couple of years, it's actually quite volatile and very different by state and by city. It's a really hard one to call. At the moment, certainly, we're looking at it with a relatively flat outlook in terms of sales at the moment. But again, if excise changes, could that have an impact? Is there more enforcement that's put in place in other parts of the country? Certainly, if that were the case, you would see, no doubt, some uptick as we have in Queensland. But again, it's very hard to predict, so we wouldn't call it.

Speaker #13: And by city . And so it's a really hard one to call at the moment . Certainly we're looking at it with a relatively flat outlook in terms of sales at the moment , but again , if excise changes , could that have an impact ?

Speaker #13: Is there more enforcement that's put in place in other parts of the country ? Certainly , if that were the case , you would see no doubt some some uptick as we have in Queensland .

Speaker #13: But again , it's very hard to predict . Oh , we wouldn't we wouldn't call it .

Speaker #7: Okay, so you're not planning for that at this stage—for any major growth in that.

Bryan Raymond: Okay. You're not planning for that at this stage, for any major growth in that.

Amanda Bardwell: No, we are not planning for that, no.

Speaker #13: We're not planning for that. No.

Speaker #7: Okay. Great. Thank you.

Bryan Raymond: Okay, great. Thank you.

Speaker #13: Thanks , Brian .

Amanda Bardwell: Thanks, Bryan.

Speaker #4: Thank you. The next question is a follow-up from Benjamin Gilbert from Jarden. Please go ahead.

Operator: Thank you. The next question is a follow-up from Benjamin Gilbert from Jarden. Please go ahead.

Speaker #3: I Steve , sorry , just to clarify , the depreciation . So you said you're expecting low single digit growth for next year because it implies it's probably going to be 100 , hundred and 50 million bucks below where consensus is sitting .

Ben Gilbert: Hi, Steve. Just to clarify the depreciation. You said you are expecting low single-digit growth for next year, because it implies it is probably going to be AUD 100 to 150 million below where consensus is sitting. So it is a decent amount lower. Is that what you are saying?

Benjamin Gilbert: Hi, Steve. Just to clarify the depreciation. You said you are expecting low single-digit growth for next year, because it implies it is probably going to be AUD 100 to 150 million below where consensus is sitting. So it is a decent amount lower. Is that what you are saying?

Speaker #3: So, it's a decent amount lower. Is that what you're saying? I...

Stephen Harrison: I did not give guidance. I was not seeking to give guidance there, Ben. I was just trying to answer the question about what had happened. If you look, for example, at the best way to look at it is actually the disclosure we give at a business unit level. For example, in Australian Food, we had 3.7% depreciation growth. I think in the second half, it was around 4%. There are certainly some one-off benefits associated with both currency and the cycling of the impairment benefit in BIG W, but I would expect it to continue to grow year-on-year.

Speaker #2: I didn't give guidance. I was not seeking to give guidance there, Ben. I was just trying to answer the question about what had happened.

Speaker #2: And so , you know , if you look , for example , at the second , the best way to look at it is actually the disclosure we give in at a business unit level .

Speaker #2: So, for example, in Australian Food, we had 3.7% depreciation growth. And I think in the second half, it was around 4%.

Speaker #2: And so yeah , there are certainly some one off benefits associated with both currency and the cycling of the impairment benefit in big W , but I would it expect it to continue to grow year on year .

Speaker #3: Okay. So it’ll grow. And obviously, we look at that second half trend for food, and then New Zealand, depending on assumptions around currency, there’ll be some increase.

Ben Gilbert: Okay. So it will grow, and obviously we will look at that second half trend for food. New Zealand, depending on assumptions around currency, there will be some increase, but obviously you have to make an assumption on FX. BIG W, obviously cycling some of the impairment, hence why that is a bit lower.

Benjamin Gilbert: Okay. So it will grow, and obviously we will look at that second half trend for food. New Zealand, depending on assumptions around currency, there will be some increase, but obviously you have to make an assumption on FX. BIG W, obviously cycling some of the impairment, hence why that is a bit lower.

Speaker #3: But assumption on FX and BIG W, obviously cycling some of the impairments, and so that's a bit lower.

Speaker #2: Yeah . That was the key . It was like worth $40 million roughly benefit year on year in big W . And so that as you're looking at a group level , I think we did try to call this out a year ago , but I'm not sure if I'm picked it up in consensus .

Stephen Harrison: Yeah, that was the key. It was worth AUD 40 million, roughly, benefit year-on-year in BIG W. That is if you are looking at a group level. I think we did try to call this out a year ago, but I am not sure if I picked it up in consensus.

Speaker #3: Okay, that's helpful. Thank you.

Ben Gilbert: Great. That was helpful. Thank you.

Benjamin Gilbert: Great. That was helpful. Thank you.

Speaker #4: Thank you. At this time, we're showing no further questions. I'll hand the conference back to Amanda for closing remarks.

Operator: Thank you. At this time, we are showing no further questions. I will hand the conference back to Amanda Bardwell for closing remarks.

Speaker #13: Thank you for joining us . This morning . As we've talked , we're pleased with the momentum that we've been able to build right across all of our businesses .

Amanda Bardwell: Thank you for joining us this morning. As we have talked, we are pleased with the momentum that we have been able to build right across all of our businesses. That is one of the most pleasing aspects of this result, is that every business in our group has contributed to an improved performance. I want to again thank our team for their incredible efforts across the year. We are pleased that more customers are choosing Woolies. We have got momentum, and we plan to continue to build on that in the year ahead. Thank you.

Speaker #13: And that's one of the most pleasing aspects of these results, is that every business in our group has contributed to an improved performance.

Speaker #13: And I want to again thank our team for their incredible efforts across the year. We're pleased that more customers are choosing Woolies.

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Full Year 2026 Woolworths Group Ltd Earnings Call

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