The Woolworths Group Ltd (ASX: WOW) endured a challenging financial year, with its share price plummeting from AU$39.73 at the end of FY 2023 to AU$33.79 on the final trading day of FY 2024. This marked a substantial decline of 14.9% over the year, contrasting sharply with the ASX 200's 7.8% gain over the same period.
Impact of Inflation and Market Conditions
Throughout FY 2024, Woolworths faced a downward trend exacerbated by inflationary pressures affecting consumer spending habits and increasing operational costs. Investors also speculated about potential regulatory pressures that could lead to structural changes within Australia's supermarket sector.
Key Events and Financial Results
A significant blow to investor confidence occurred on February 21, when Woolworths announced its half-year results alongside the unexpected departure of long-time CEO Brad Banducci. The company reported a 4.4% year-on-year increase in revenue to AU$34.64 billion for the six months. However, losses amounted to AU$781 million, primarily due to a non-cash write-down of AU$1.5 billion related to its New Zealand operations.
Market Reaction and Strategic Outlook
Following the third-quarter update on May 2, Woolworths disclosed a modest 2.8% rise in total sales to AU$16.8 billion. Yet, challenges persisted, particularly evident in a 4.1% decline in sales for its Big W business segment. Outgoing CEO Brad Banducci acknowledged the tough market conditions, noting a noticeable shift in consumer sentiment and shopping behaviors since the previous Christmas season.
Looking ahead, Banducci expressed cautious optimism amidst continued competitive pressures and the prospect of inflation returning to low single-digit rates. The company anticipates challenging trading conditions over the next 12 months, emphasizing the need to navigate effectively through ongoing market challenges.
Current Market Position
As of the nascent FY 2025, the Woolworths share price has shown a marginal increase, currently trading at AU$33.94. This slight uptick reflects cautious investor sentiment as the company prepares to transition to new leadership under incoming CEO Amanda Bardwell, effective September 1.