Woolworths' (ASX:WOW) fiscal 2026 outlook could see an uplift if the market chooses to bank some of the AU$400 million in annualized gross cost savings the company expects by the end of the year as a result of its efforts to "simplify" its above-store support office, according to a Wednesday note by Jarden Research.

In its fiscal first-half results, the retailer's Chief Executive Amanda Bardwell said that the AU$400 million in savings is on top of the store and supply chain productivity program designed to partly offset inflation.

The company's revenue for the first half was AU$35.9 billion, slightly above its forecast of AU$35.3 billion, but the company's net profit after tax (NPAT) fell 21% to AU$739 million, 7% below the investment firm's expectations, Jarden said.

However, market expectations were low given AU$95 million in supply chain disruptions during the first half, Jarden added.

Jarden believes that the results are considered "okay" but has sparked questions if Woolworths would choose to bank or reinvest its savings and noted that the company needs a better balance between short-term trading and long-term strategy.

Jarden has an overweight rating on Woolworths and a price target of AU$36.70.