Woolworths reported FY26 sales growth of 4%, EBITDA growth of 7% and EBIT up 13%. The company’s sales momentum remains good and it should continue for the next six months, but then outperformance is likely to fade as Woolworths laps higher promotional activity. We expect a modest pick-up in inflation. Woolworths earnings growth was helped by unusually low depreciation growth. Nevertheless, Woolworths has more margin expansion opportunity over the next three years than Coles. The NZ and Big W segments had better earnings. The path to a 10%+ return on funds is plausible for these businesses but margins would still be low by historical and industry standards.

Harvey Norman reported FY26 EBITDA up 8%. However, cracks are emerging with sales slowing and Franchise segment EBITDA dropping in the second-half. Conditions are likely to deteriorate over the next 12 months, especially if Harvey Norman continues to fund more franchisee discounting. Sales are also falling in NZ, Harvey Norman’s second largest market. Harvey Norman usually delivers more operating leverage than other large retailers. As we enter a downturn in the housing cycle, lower sales will reduce earnings.

dusk reported sales growth of 14% in 2H26 and full year growth of 8.4%. Gross margins improved 279bp in 2H26 driven by promotional discipline, currency benefits and improved logistics.