Woolworths Group Ltd (ASX: WOW) shares are losing ground today.
Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed yesterday trading for $26.39. In early afternoon trade on Tuesday, shares are changing hands for $26.18 apiece, down 0.8%.
For some context, the ASX 200 is down 0.2% at this same time.
With today's dip factored in, Woolworths shares are now down a sharp 21.7% since market close on 26 August.
That date's important because Woolies reported its FY 2025 results before market open on 27 August. Shares closed down 14.7% on the day, and they've sunk another 8.2% since then.
Does that make the Aussie supermarket chain a screaming buy or a stock that's best still avoided?
For some greater insight into that question, we defer to Morgans' Damien Nguyen (courtesy of The Bull).
Image source: Getty Images
Are Woolworths shares a good buy today?
Having reviewed the ASX 200 stock, Nguyen doesn't recommend rushing out to buy shares. But he doesn't believe stockholders should sell either.
"The supermarket giant continues to be a defensive play in the retail sector, supported by strong market positions in food and general merchandise," said Nguyen, who has a hold recommendation on Woolworths shares.
"However, recent performance has been mixed in response to margin pressure and subdued sales growth," he added.
Digging into the company's FY 2025 results, Nguyen noted:
Normalised group sales in full year 2025 were up 3.6% on the prior corresponding period, but normalised group net profit after tax was down 17.1%. Management has flagged fiscal year 2026 as transitional, but it may take time to restore momentum.
Nguyen concluded, "We suggest income-focused investors hold the stock. The shares have fallen from a yearly high of $33.76 to trade at $26.53 on October 2."
As for that passive income, Woolworths shares delivered 84 cents in fully franked dividends to eligible stockholders over the past year. At the current share price, that sees Woolworths stock trading on a fully franked trailing dividend yield of 3.2%.
What did management flag for FY 2026?
As Nguyen mentioned above, the supermarket expects the 2026 financial year to beat the decidedly disappointing results delivered in FY 2025.
Commenting on the FY 2026 outlook on the day of the results announcement, Woolworths CEO Amanda Bardwell said:
We expect to return to profit growth following a disappointing FY25. We will continue to rebuild customer trust through compelling value and retail execution excellence, simplify the way we work and become a more focused, lower-cost retailer with a differentiated Food offer at our core
Some of this will take time but I am confident that the strength of our brands, assets and team can see us deliver a much-improved performance.
Woolworths shares are down 20.6% over 12 months.
