Woolworths shares were on track for their worst losses in years following the supermarket group's announcement that Brad Banducci would be retiring as chief executive later this year.
At midafternoon Wednesday, WOW shares had dropped 7.2 per cent to a nearly year and a half low of $33.27, on pace for their biggest fall since a 7.7 per cent loss on December 14, 2021.
The supermarket group also on Wednesday posted its half-year earnings $1.69 billion, up 3.3 per cent from a year ago, with sales up 4.4 per cent to $34.6 billion. Trading in the first seven weeks of 2024 had continued to moderate.
Mr Banducci said it had been a strong half for Woolworths' flagship Australian supermarkets but a challenging environment for Big W and Woolworths' New Zealand operations, the value of which the group wrote down by $NZ1.6 billion ($A1.5 billion).
E&P Capital retail analyst Phillip Kimber said the share price drop was to be expected, given the departure of a well-respected CEO during a period of heightened press and government scrutiny as well as very weak January Australian food sales.
Woolworths chairman Scott Perkins was emphatic that Mr Banducci's departure had nothing to do with the recent political controversies over Woolworths pricing and the stocking of Australia Day items.
"This process has been in train, there was no change in the timetable, no expedition at all," Mr Perkins said, adding that succession planning began in the middle of 2023 and he'd been interviewing candidates since the back half of the year.
Mr Banducci told reporters the board actually offered to let him delay announcing his retirement after he found himself in the news.
"And I did consider that for a moment. But we did have a plan, and the best thing was to stick to the plan," Mr Banducci said. "That wouldn't have been authentic and right in the context of what we were doing and in the context of the team that we have."
While Mr Banducci found himself the midst of controversy in recent weeks, analysts who cover the company on a daily basis were effusive about his leadership.
"I think you've been wonderful CEO. Most people on this call should remember when you inherited Woolworths, it was a basket case," Bank of America analyst David Arrington said.
"What you've done is not only turn this business around to where it normally should be as a leading business, but you've got humility into the company. Previously, the management was very arrogant."
UBS analyst Shaun Cousins agreed, saying that when Mr Banducci began as CEO eight years ago, "Woolworths had not put the customer first, and trade feedback had definitely been that arrogance rather than humility was the culture within the organisation."
Mr Banducci said the Australia Day controversy, where there were calls for Woolworths' boycotts after the company made a commercial decision not to stock patriotic merchandise for the holiday, hadn't led to any loss in market share.
"That doesn't mean we can't learn from what happened," he said. "We know we can do a better job, and we will come back and be very thoughtful in how we respond and how we operate going forward.
"We had some customer segments that we could have done a better job of making them feel welcome and included at our business on Australia Day and we will address that."
The announcement of the Senate inquiry on supermarket pricing has had a bigger impact, leading to a material drop in overall reputation and brand net promoter scores for the major Australian supermarket chains, Mr Banducci said.
Mr Banducci said he planned to be an active CEO until WooliesX managing director Amanda Bardell takes over in September.
