Owners of Woolworths Group Ltd (ASX: WOW) shares, get ready to rumble. The company is set to release its earnings for the first half of financial year 2022 on Wednesday.
The six months ended 31 December were a chaotic time for the company as it battled amid outbreaks of COVID-19.
As of Monday's close, the Woolworths share price was $34.49, 1.41% higher than it was at the end of Friday's session.
Let's take a closer look at what we know about the supermarket giant's impending earnings.
Could this drive the Woolworths share price on Wednesday?
Of course, COVID-19 impacts will likely have impacted Woolworths' earnings during the first half.
The company provided the market with a trading update in mid-December detailing its struggles against COVID-19's Delta variant.
Within the update, Woolworths CEO Brad Banducci described the first half as "one of the most challenging halves [the company had] experienced in recent memory".
"The ongoing material costs of operating in a COVID environment has impacted our expected earnings in H1," Banducci continued. "COVID has had a significant impact on costs, even more so than last year due to the combination of both direct COVID-related costs, together with the indirect impacts from disruption caused by COVID."
For the first half, the company expected its Australian Food segment to report around $150 million of additional COVID costs.
Disruptions in stores and distribution centres were expected to add another $60 million to $70 million of costs.
Woolworths stated it expected its Australian Food segment to report earnings before interest and tax (EBIT) of $1.19 billion to $1.22 billion.
It reported around $1.32 billion of EBIT for the first half of financial year 2021.
Big W, meanwhile, was expected to end the half with EBIT of $20 million to $30 million.
For comparison, it reported $133 million of EBIT for the previous first half.
Additionally, following the challenging period, the supermarket giant will be handing staff a "Christmas thank you" payment worth between $35 million and $40 million. It also invested around $40 million into building its eCommerce abilities during the period.
The Woolworths share price tumbled 7% on the back of the trading update.
What else could be included in Woolies' earnings?
Other happenings that might find their way to Woolworths' half-year report include the demerger of its food and hospitality business Endeavour Group Ltd (ASX: EDV).
The business was split from Woolworths late in financial year 2021. This will be the first time the company reports without it. Thus, Woolies' half-year report might look quite different this year.
On top of that, some brokers, such as Credit Suisse, have dropped their expectations of the supermarket giant.
As The Motley Fool Australia recently reported, the broker's analysts believe a guidance downgrade could be included in Woolworths' half-year results.
Additionally, my Foolish colleague Zach Bristow recently reported JP Morgan is also tipping lower earnings for financial year 2022. Though, it's bullish on the Woolworths share price in the long-term.
