Officeworks Revenue Up 4.7pc, Earnings Slide Amid Major Cost Reset
Source: Choice.com Officeworks by Marianna Longmire
Officeworks reported revenue of $1,842 million for the first half of FY26, up 4.7 per cent on the prior corresponding period. Earnings were $68 million, down 21.8 per cent, or $19 million, in line with previous guidance.
During the half, Officeworks commenced a significant transformation program aimed at transitioning the business to a low-cost operating model. The program is designed to support everyday low prices for customers while driving sustainable, long-term earnings growth.
Key initiatives include restructuring activities to reset the cost base, replacing the ERP system to improve operational efficiency, strengthening talent and management capability, constructing a new automated supply chain facility in Queensland to support omnichannel growth, and enhancing sourcing and own-brand product ranges to improve customer value.
As part of the transformation, Officeworks will optimise its in-store and online product range, enabling the introduction of new and innovative products. The business will also expand own-brand penetration through improved sourcing arrangements, further enhancing its value proposition.
The half-year earnings result includes $15 million in transformation-related costs, largely reflecting restructuring and ERP implementation expenses. Earnings were also impacted by clearance activity undertaken to support the introduction of new and expanded product ranges.
Source: Wikipedia Officeworks Ltd.
Sales growth was driven by strong performance in key categories, including Technology and Print & Create, partially offset by lower Furniture sales. Growth in Technology was supported by solid demand for computers as customers upgraded devices, alongside an expanded range of AI-enabled computers, gaming products and TVs. Continued investment in low prices resonated with customers, driving growth in transactions and units sold.
Performance during the 2026 Back to School period was solid, supported by value-conscious customers and an expanded Education offer following the integration of the Box of Books acquisition.
Officeworks continued strengthening its omnichannel proposition by investing in its store network and expanding routes to market, including launching on the Kmart Marketplace and forming a partnership with Uber Eats.
During the half, the company opened two net new stores and completed two store relocations.
Officeworks reported revenue of $1,842 million for the first half of FY26. (Source: Officeworks/LinkedIn)
Officeworks will continue executing initiatives to support its transformation program in the second half. Approximately $25 million in one-off costs are expected in 2H26, primarily relating to further restructuring activities and ERP replacement.
The business remains focused on becoming a low-cost operator, transforming its technology offer and service model, scaling its B2B and Education segments, and enhancing the omnichannel customer experience. Further investments in lower prices are planned for the second half of FY26 to support value-conscious customers.
Officeworks expects to open one net new store in the second half.
Over time, the transformation program is expected to structurally lower the cost base and position the business for improved performance, with benefits anticipated to positively impact earnings from FY27 onward.
Article Source: news.com.au | Officeworks Revenue Up 4.7pc, Earnings Slide Amid Major Cost Reset