Woolworths: revenue grows, but net profit falls — margin under pressure

26 апреля 2026 года Woolworths Holdings раскрыла результаты за финансовый год, закончившийся в марте 2026 года. Выручка выросла на 4,2% до 82 800 млн ZAR, EBITDA — на 3,1% до 8 649 млн ZAR, но чистая прибыль снизилась на 5,1% до 2 319 млн ZAR. При текущей цене акции выглядят скорее привлекательно: мультипликаторы ниже исторических уровней, а дивидендная доходность около 5%.

Key takeaways

— Revenue grew 4.2%, but net profit fell 5.1% — margin compressed

— EBITDA margin declined from 10.5% to 10.4% — pressure on operational efficiency

— Net debt is negative: the company has a net cash position

— Dividend yield of 5.0% — above the three-year average

— On the portal's model, the upside is -2% — fair value close to current price

Attractiveness

Key figures, ZAR bn

Revenue grew 4.2%, but net profit fell 5.1% — margin compressed

For the fiscal year ended March 2026, Woolworths' revenue increased 4.2% to ZAR 82,800 million. EBITDA grew 3.1% to ZAR 8,649 million, indicating a slowdown in operating momentum relative to revenue.

Net profit declined 5.1% to ZAR 2,319 million. This means revenue growth did not translate into profit: net margin fell from 3.1% to 2.8%. The reasons for this divergence are not disclosed in the filing, but the pressure on profitability is evident.

EBITDA margin declined from 10.5% to 10.4% — pressure on operational efficiency

EBITDA margin for the reported period was 10.4%, compared to 10.5% a year earlier. The decline of 0.1 percentage point looks small, but combined with 4.2% revenue growth, it means operating expenses grew faster than revenue.

This could be due to cost inflation, investments in growth, or a shift in sales mix. The company does not disclose details, so the exact cause cannot be identified, but the trend is clear: operating efficiency slightly deteriorated.

Net debt is negative: the company has a net cash position

As of the latest balance sheet date, Woolworths' net debt was -ZAR 3,099 million, meaning cash and equivalents exceed debt. Net debt to EBITDA for the trailing twelve months is -0.36, indicating financial strength.

Over the last 12 months, net debt increased by ZAR 0.3 billion, and by ZAR 1.0 billion compared to the previous reporting date. Nevertheless, the company maintains a net cash position, providing a buffer for investments and shareholder returns.

Dividend yield of 5.0% — above the three-year average

Over the trailing twelve months, Woolworths paid dividends providing a yield of 5.0% at the current price. This is above the three-year average, making the stock attractive for income-oriented investors.

The dividend amount for the reported year is not disclosed in the filing, but if the payout policy is maintained and current profit persists, the company can sustain payments. The key risk is the decline in net profit already observed: if it continues, the dividend could be cut.

On the portal's model, the upside is -2% — fair value close to current price

Our value-creation model, based on EBITDA growth and target multiple, shows the share is trading 2% above its fair value. This implies limited upside, but no significant downside either.

With P/E LTM of 15.36 and EV/EBITDA LTM of 3.76, the valuation appears moderate. Return on equity (ROE) is 16.5%, confirming efficient use of shareholder funds. However, given the negative profit trend, the potential for upward re-rating is limited.

Valuation on the latest reported figures

Bottom line

Woolworths showed moderate revenue and EBITDA growth, but net profit declined, reflecting margin compression. The company maintains a net cash position and pays dividends with a 5.0% yield, supporting the stock's attractiveness. However, on the portal's model, the share is fairly valued, and improvements in profitability are needed for share price growth. Overall, the shares are rather attractive for income-oriented investors, but not for growth seekers.