Australian low-price department store BIG W has reported a 45.9 per cent fall in its earnings before interest and tax (EBIT) for the first half of FY25, hitting $29 million.
The retailer's EBITDA, which includes depreciation and amortisation, was down 13.6 per cent to $140 million.
This comes alongside a 0.4 per cent fall in total sales to $2.58 billion for the half, with both store sales and online down by 0.3 per cent and 1.6 per cent respectively.
The results were released by Big W's parent company Woolworths Group, which noted that sales growth was impacted by lower average selling prices and the late arrival of its spring/summer clothing range.
“In clothing, the sales performance was impacted by the timing of stock receipts combined with shipping delays that affected availability of the spring/summer range at launch and led to elevated levels of clearance activity in Q2,” the group reported.
As for the earnings drop, Woolworths Group cited mix changes to lower priced items, elevated clearance activity and wage cost inflation.
“While we expect to see further progress in Big W’s clothing and home range reset, improved item growth is being tempered by lower average selling prices despite strong cost control,” Woolworths Group CEO Amanda Bardwell said.
“At this stage, we expect BIG W’s H2 LBIT to be broadly in line with the prior year (H2 F24 LBIT: $40 million).”
Meanwhile, Big W’s customer metrics in the half declined after a busy Christmas trading period. According to Woolworths Group, voice of the customer NPS across store and online at Big W ended the half at 58, down four points on Q1 F25 and two points on the prior year driven by a decline in eCommerce metrics.
Store-controllable VOC ended the half at 80 per cent which was flat compared to the prior year, however down three points compared to Q1.
Alongside the total sales drop for the retailer, items grew by 4.1 per cent driven by transactions as new seasonal ranges, and Black Friday and Christmas events offering more value resonated with customers.
“However, item growth was offset by lower average selling prices due to a shift in mix towards lower priced items and price reductions to provide customers with greater value,” Woolworths Group reported. “H1 comparable sales also decreased by 0.4 per cent.”
Across the four trading categories, everyday sales increased with beauty care a highlight, Woolworths Group noted, driven by an affordable range and strong value offering.
In play, Black Friday trading in AV/ Tech and Christmas trading in toys more than offset the subdued performance of the gaming market.
Double-digit unit increases drove sales growth in home with new spring/summer ranges resonating with customers across categories.
Big W eCommerce sales – excluding Big W Market, theretailers's marketplace platform – declined 1.6 per cent in the half to $279 million with e-commerce penetration of 10.8 per cent decreasing “modestly” on H1 F24.
“E-commerce sales momentum improved in Q2 with sales increasing by 0.8 per cent compared to the prior year. Including Big W Market, eCommerce GMV increased by 40 per cent to $408 million in H1 with penetration reaching 15 per cent of sales.
Traffic to the BIG W website and app increased by 17.5 per cent supported by the third-party range expansion of BIG W Marketto over 400,000 items.