Woolworths Share Price Takes a Hit

Woolworths WoW

What happened to Woolworths share price?

After closing at $33.95 yesterday, WOW shares are trading 8.4% lower this morning at $31.11.

Why are WOW shares down today?

The company reported a fall in half yearly profit of 3.1% to $1.28 billion — below analyst expectations of $1.37 billion. It also cut its profit guidance for the full year. WOW now expects full year profit growth of 1.8%, compared to earlier estimates of 4-7% growth.

The struggling Masters hardware stores dragged on earnings, with losses growing to $103 million in the half year, up from a $64 million loss for the prior six months.

Despite the fall in profit, Woolworths has raised its interim dividend by 2 cents per share to 67 cents.

What now for Woolworths Ltd?

The company said it will undertake investment in its supermarkets, which will hurt full year earnings, but bring long term benefits. Management said rather than focussing on achieving its earlier full year guidance, ‘We have decided to provide ourselves with additional flexibility to make the necessary investments to deliver on our long-term plans and the associated shareholder value creation.’


Meagan Evans,
for The Daily Reckoning Australia

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Meagan Evans
Meagan Evans, has seen from the inside of the investment industry how easy money can lead to bad management decisions. She holds a degree in Finance and a Master’s in Business Administration and, as a Certified Financial Technician, Meagan employs both technical and fundamental analysis to make solid investment decisions

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