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 2.981% lower on Wednesday
39 of the 633 Caltex-Woolworths fuel network sites will exit the Caltex-Woolworths alliance.
This means these 39 sites will no longer offer the Woolworths fuel discount redemptions.
However, 92 Caltex operated sites will be rebranded as a Star Mart or Star Shop. By the end of 2015, these new stores, plus a couple to- be- completed sites will offer the Woolworths fuel redemption.
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The company assured this new arrangement won’t have a material profit impact on the company.
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.
It’s been a rough month for Woolworths shareholders. It’s dropped 9.22% since 10th November.
In addition to that, the share price is currently below $32, its lowest point since February 2013. The share price could still head lower as there is very little technical support for the price above $30.
Shae Smith+
Editor, Money Weekend
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