Woolworths Group Ltd (ASX: WOW) is under pressure as disappointing earnings and analyst downgrades weigh on market sentiment, sending the share price towards its 52-week low. The stock is attempting to find support after a significant sell-off.
The WOW share price experienced considerable volatility, hitting an intraday low of A$27.73 before closing at A$27.85, down 3.13% on the day. This latest decline extends a week of heavy losses, with the stock shedding 16% since the company’s recent earnings announcement.
The catalyst for the downturn was the release of Woolworths’ full-year results on August 26, 2025, which revealed a 19% drop in underlying net profit, falling from A$1.71 billion to A$1.39 billion. Furthermore, the company signaled a slow start to fiscal year 2026, with its Australian Food division reporting sales growth of just 2.1% in the first eight weeks, lagging behind both expectations (4.1%) and competitor Coles (4.9%). The company also reduced its final dividend to 45 Australian cents per share from 57 cents the previous year.
Adding to the negative sentiment, Macquarie Group Ltd downgraded Woolworths’ rating from “outperform” to “neutral,” also lowering its 12-month price target to A$30.30 from A$33.40. The broker highlighted the need for continued price reinvestment and improvements in customer perception as key challenges. As reported by the Motley Fool Australia, Macquarie cited the need to regain market share as a factor in their revised outlook.
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Woolworths is also navigating ongoing scrutiny regarding pricing practices. The Australian Competition and Consumer Commission (ACCC) initiated legal action against the company in September 2024, alleging misleading conduct in its “Prices Dropped” promotions.
The company has also seen leadership changes, with CEO Brad Banducci announcing his resignation in February 2024 amidst political pressure and a public inquiry related to potential price gouging.
Woolworths faces a challenging period as it seeks to address concerns about profitability, market share, and regulatory compliance. The markets will be closely watching the company’s response and its ability to regain market confidence, especially given the current economic climate and competitive landscape.
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