Woolworths has posted an after-tax loss of $972.7 million in its half-year results, after the retailer's failed venture into the home improvement market dragged on its bottom line.

The financial result represents the grocery giant's first loss since it was listed on the Australian stock exchange 23 years ago.

In the six months to January 3, Woolworths said first-half results slumped 176 per cent from the $1.28 billion profit the supermarket giant posted in the previous corresponding period.

Woolworths said impairment charges and costs to exit its Masters Home Improvement arm would total $1.89 billion.

Losses at Masters increased by 22.9 per cent to $137.9 million, on the back of costly store openings and mixed gross margins.

"We are rebuilding the Woolworths business," said chairman Gordon Cairns in a statement released to the Australian Securities Exchange.

"While we have made progress, it will be a three to five year journey and there is much to do.

"The decision to exit home improvement will allow Woolworths to focus its energy and resources on strengthening and executing its plans in its core businesses."

Last month, Woolworths announced it would exit the loss-making Masters business, by selling or winding up the stores, after buying out its US partner, Lowe's.

"It appears it's been poorly executed," said Roger Montgomery, chief investment officer at Montgomery Investment Management.

"It didn't appeal to the trade market, it was designed to appeal to a different market, that market didn't make the purchasing decisions [of] the sorts of products hardware stores are expected to sell.

"So arguably, there was a mismatch between the design of the store and the most profitable audience."

'Outstanding' new chief executive

Woolworths has also appointed a new chief executive - the current managing director of the organisation's Food Group, Brad Banducci, who Chairman Cairns described as an "outstanding candidate" in the field, during an investor briefing.

In a statement, the company said it had undertaken a rigorous international search to find the best person to rebuild the business and return it to sustainable growth.

Mr Banducci is understood to have been the only internal applicant for the role.

Most analysts were anticipating the appointment of an external candidate, who could bring a change of culture to the organisation and reinvigorate its supermarket business.

Woolworths' underlying net profit fell by 33 per cent in the half-year to $926 million before write-downs, which was in line with the company's previous forecasts of $900 million to $1 billion.

Total sales for the half year fell by 1.4 per cent to $32 billion.

Comparable sales in Woolworths's food and liquor divisions fell by 0.8 per cent to $22.3 billion in the six month period, as the retailer reduced grocery prices to try to win back shoppers from rivals Coles and Aldi.

Woolworths has also cut its interim dividend by 34 per cent to 44 cents per share.

That fell short of the market's forecast for a 48 cents per share dividend.

Shares in Woolworths slumped as much as 6.3 per cent to touch nine-year lows, before clawing back some losses to fall 2.5 per cent to $21.35.