(Updates with detail on results, dividend) Feb 22 (Reuters) -...

(Updates with detail on results, dividend)

Feb 22 (Reuters) - Top Australian grocer Woolworths Group Ltd (WOW) posted a 25% rise in its first-half profit on Wednesday, modestly beating a Macquarie estimate, as soaring inflation supported sales growth while pandemic-related expenses slowed.

Demand for groceries and essential items remained robust as rising prices and subsequent cost-of-living pressures forced shoppers to pull back on discretionary spending.

"Our first-half result benefitted from a focus on improving our customer shopping experience, restoring our operating rhythm, the non-recurrence of material COVID costs in the prior year and strong seasonal trading," the retailer said.

The company said net profit attributable to continuing operations, excluding one-off costs, was A$845 million ($578.99 million) for six months ending Jan. 1, compared with A$676 million a year earlier. That compares with a Macquarie estimate of A$842 million.

Woolworths was helped by a 2.5% jump in total sales of top revenue generating unit Australian Food to A$24.39 billion, with gross margin ticking 48 basis points higher to 30.7%.

The Sydney-based grocer declared an interim dividend of 46 Australian cents per share, compared with 39 Australian cents per share a year earlier. ($1 = 1.4594 Australian dollars)