What Happened to the Woolworths Share Price?
Woolworths Limited’s [ASX:WOW] main business is its Woolworths supermarket chain. But the company also has some chain retail interests, including the Big W discount stores, Masters Home Improvement, and the Woolworth/Caltex petrol alliances. The company also runs liquor chain stores BWS, Dan Murphy’s and Cellarmasters. Topping it all off are some hotel and leisure interests.
The share price closed 2.49% higher on Wednesday.
Why Did This Happen to WOW Shares?
Woolworths’ first quarter results were good, but not as good as its competitor.
Total sales increased 3% to $16.15 billion.
However, if petrol sales hadn’t fallen 6.1%, Woolworths total sales would have grown 4.1%.
Food and liquor sales, a core focus of the retailer, were up 3.9%.
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Chief executive Grant O’Brien admitted the results were slightly lower than the 4–7% net profit guidance. Yet there was no need to revise this, as he firmly believes the company will achieve this during the Christmas period.
The stock was heavily sold off over Monday and Tuesday but regained some ground today.
What Now for WOW?
Woolworths can be a solid defensive stock in your portfolio. However, be aware that the Masters Home Improvement chain stores are currently a drag on earnings. The Masters stores aren’t expected to break even until 2016.
The BIG W chain isn’t helping earnings either. Big W and its apparel catalogue/online business fell 4.1%, making it the eighth loss in a row for the business. Chief executive Grant O’Brian said BIG W’s transformation is still underway and will drag on results over the financial year.
Support for the share price appears to forming around $32.
If you are looking to add WOW shares to your portfolio, don’t overpay for the stock. Woolworths regularly dips on market sentiment.
Shae Smith+
Editor, Money Weekend
The post Why did the Woolworths Share Price Rise Today? appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
