Woolworths, the nation's biggest retail group has delivered an 8.5 percent lift in full-year earnings to $2.45 billion.
According to ABC News, the supermarket would have been much stronger had it not taken on rival Wesfarmers with an expansion into hardware.
The result, struck against a 4.7 per cent lift in group sales to $60.8 billion, was slightly below analyst forecasts but within the company's guidance.
Shareholders were rewarded with a 1 cent lift in the final dividend to 72 cents, taking the full year payout to $1.37.
While 3 percent higher than last year, it’s a modest payout lift compared with many top 100 companies this reporting season, including rival Wesfarmers which showered its shareholders with a special dividend and capital return.
Earlier this month, Woolworths revealed that losses on its $2.6 billion home improvement division had blown out to $176 million and that the new Masters big box hardware operation would not turn a profit before 2017.
Woolworths chief executive Grant O'Brien says the company is committed to competing against hardware chain Bunnings.
“It was forecast from the very beginning that it would be some years to profitability, so there's no surprise in respect to that at all, and it is quite typical of building a new business, and particularly a chain business,” he said.
The result was driven by a 7.2 per cent lift in normalised earnings from its food, liquor and petrol operations even after petrol earnings declined almost 34 per cent after the competition regulator restricted the use of shopping discounts on fuel.
Liquor store sales rose 4.6 per cent to $7.4 billion, while hotels delivered a further $1.47 billion, a rise of 2.2 per cent and Big W sales dropped 3.1 per cent following a year of difficult trading conditions and price deflation, resulting in an earnings decline of 18.8 per cent to $152.9 million.
Chief executive Grant O'Brien was pleased with the result, but pointed to continuing work to lift the general merchandise and hardware divisions.
But he warned that trading conditions remained difficult with consumers concerned about economic uncertainty and cost of living pressures.