Woolworths will pay $44.5 million to settle a class action with shareholders, who may have bought shares at an inflated price because of improper company reporting.
The retail giant on Friday said the settlement did not admit liability and was subject to court approval.
Law firm Maurice Blackburn said Woolworths in 2015 made two announcements that it would not meet earnings guidance, and that it would take time and money to improve sales.
The firm said it had serious questions about earlier guidance and whether Woolworths should have sooner said it would not achieve it.
Any inaccurate guidance, or lag in reporting, could have caused investors to pay more for the shares than what they were really worth.
The class action applies to investors who bought shares between August 29, 2014, and May 5, 2015.
The company reported the settlement after ASX trading closed.
Woolworths said the sum, if approved, would not have any financial impact on the group.
Shares closed lower by 0.34 per cent to $40.86.
