The supermarkets operator said its stock flows and operating rhythm were rocked by the scare in the first six months of fiscal 2022.
"The first half of F22 has been one of the most challenging halves we have experienced in recent memory due to the far-reaching impact of the COVID Delta strain," chief executive Brad Banducci said on Tuesday in a market update.
He said the costs of trading in a COVID environment would affect first-half earnings.
Woolworths, which will release first-half earnings in late February, expects a direct costs from the virus of $150 million in its Australia Food division in addition to indirect costs of between $60 million to $70 million.
These costs included rapid antigen testing of staff, offering vaccination at some sites, masks, increased cleaning and more.
Australian Food earnings before interest and tax are forecast to be between $1.19 billion and $1.22 billion, compared with about $1.33 billion in the same period in fiscal 2021.
In a call with analysts, Mr Banducci was asked whether this level of costs would continue if the coronavirus situation did not improve in 12 months.
The Woolworths boss said he did not think so. Staff were learning from their experiences and coronavirus testing was becoming cheaper.
Mr Banducci did see challenges in Christmas trade, namely sourcing goods due to the supply chain difficulties of the pandemic.
"It's not going to be an easy ride into Christmas," he said during a call with analysts.
"We'll have a white-knuckle ride - not in demand, but in having the stock there for them to buy."
Consumer electronics and some toys were proving difficult to source for Big W stores.
The retail giant will also book a bonus payment for staff of between $35 million and $40 million as a way of saying thank you for their efforts during the pandemic.
Mr Banducci said losing workers could result in material (substantial) training costs for new employees.
Employers across Australia have battled to attract and retain staff during the pandemic without access to foreign workers.
Shares in the company on the ASX were down 7.74 per cent to $37.42 at 1446 AEDT.
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