South African upscale retailer Woolworths Holdings reported a 24.8 per cent decline in H1, FY25 profits, as sales in its apparel divisions across South Africa, Australia and New Zealand remained below expectations.
The company’s profitability was impacted by a lower-than-expected revenue growth in its clothing businesses, along with pressure on gross profit margins and increased operating expenses due to its transformation initiatives. Its adjusted earnings before interest and taxes (EBIT) contracted by 13.7 per cent to 2.8 billion South African rand ($151.62 million USD).
The group’s fashion, beauty, and home sales in South Africa increased by only 2.5 per cent, while in Australia and New Zealand, where the company owns the Country Road fashion chain, sales declined by 6.2 per cent.
This financial report highlights the challenges faced by retailers in navigating fluctuating consumer demand and the impact of strategic transformation initiatives on short-term profitability.
