Woolworths' first half profit has grown to $1.15 billion as earnings from its supermarkets rose by six per cent.
The supermarket giant's net profit in the six months to December 31 was up 19 per cent from $966.9 million in the previous corresponding period.
Earnings from its supermarkets were six per cent higher than the previous corresponding period at $1.65 billion, due to further growth in market share and customer numbers, Woolworths said.
The company declared an interim fully-franked dividend of 62 cents, up from 59 cents in the previous corresponding period.
The company has also improved its forecast for its full year performance.
It expects net profit after tax from continuing operations to grow by between four and six per cent from the previous financial year.
Woolworths had previously forecast growth of between three and six per cent.
"Whilst the Australian and New Zealand retail sectors continue to experience some challenging trading conditions, we have seen good progress against our strategic initiatives which have led to strong profitability growth for (the first half)," the company said in a statement on Thursday.
Woolworths' net profit from continuing operations, which excludes its electronics business Dick Smith, was up 4.2 per cent in the six months to December at $1.25 billion.
Woolworths served on average 20.2 million customers per week, it said, and food and liquor sales rose by 4.7 per cent from the previous corresponding period to $20.49 billion.
Big W also posted strong earnings growth, up eight per cent to $129.5 million, as a result of freight and storage cost savings and a changed approach to promotions, Woolworths said.
Woolworths' hotels business also increased earnings as a result of its purchase of 29 hotels and 10 bottle shops during the six months to December.
The company's home improvement franchise Masters now has 25 stores, and generated sales of $637 million in the six months to December.