Woolworths Group Ltd (ASX: WOW) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed yesterday trading for $26.82. As we head into the Friday lunch hour, shares are changing hands for $26.67 apiece, down 0.6%.
For some context, the ASX 200 is just about flat at this same time.
That's today's price action for you.
Now here's how Woolworths aims to boost its struggling BIG W business.
Image source: Getty Images
Woolworths shares pressured by slumping BIG W earnings
Woolworths shares have significantly underperformed Coles Group Ltd (ASX: COL) shares over the past year, with Woolies getting little help from slumping earnings at BIG W.
When the ASX 200 supermarket reported its full-year FY 2025 results on 27 August, investors learned that BIG W had posted a $35 million earnings before interest and tax (EBIT) loss. That was down from a positive EBIT of $14 million in FY 2024.
In the company's latest effort to revive its BIG W business and spur a rebound in Woolworths shares, the supermarket announced this week that it is upping its exposure to so-called budget beauty items.
Management said that a "suite of viral cosmetic brands with more than 230 million likes collectively on TikTok" is now available on BIG W shelves.
The company said that of the 420 new products from 22 new brands, 72% are available for less than $25, with half of those budget beauty products priced at less than $15.
Commenting on the shakeup, BIG W beauty category manager Taylah Gahan said:
We've scoured the globe and kept a close eye on social media trends to bring the most buzz-worthy brands directly to our stores, giving Aussies a luxe-for-less shopping option. This includes the launch of our own brand 'Beauty Bar'…
Gahan added:
Not only have we refreshed our range, but we're also enhancing our stores, to provide shoppers with a beauty shop within shop experience and great customer service in our BIG W stores.
A word from the CEO
Commenting on BIG W's performance on the day of the company's FY 2025 results release, when Woolworths shares closed down 14.7%, CEO Amanda Bardwell said, "We will begin to transition BIG W to its own fit for purpose technology platform while remaining focused on improving the performance of the business."
She added:
BIG W continues to reposition its range to provide more value and affordable options to customers. We expect improvements in gross margin and an ongoing focus on cost to lead to an improved financial performance.
Looking ahead, Bardwell said, "For FY 2026, BIG W is currently expected to be EBIT and cash flow positive."
With today's intraday fall factored in, Woolworths shares are down 19.8% since this time last year.
