Big W has posted a 64.4% decrease in half year losses, from $27 million to $10 million.
Sales climbed 1.1% to $2.04 billion for the 27 weeks to December 31.
The turnaround follows an internal restructure of the business.
Woolworths CEO Brad Banducci said Big W is performing in in line with the restructure.
“Customers are noticing improvements, resulting in a 1.6% increase in transactions and 5.4% growth in the number of items sold in the half."
Key initiatives included retail price reductions, with increased sales volumes via lower cost products.
These reductions will continue into the second half, along with improvements in stock flow and enhanced digital offerings.
Big W has also refreshed 121 stores during the first half and re-joined the Woolworths Rewards Loyalty Program.
While the business shows promise, a loss of $80 to $120 million is still expected for the financial year.
This is lower than the $165 million clocked last year.