WOW - Woolworths Group

[sptrawler]

WOW at last seem to be working to plan, Brad Banducci seems to have his head screwed on the right way. IMO

https://www.smh.com.au/business/com...-marriage-of-convenience-20180705-p4zpme.html

 

[nulla nulla]

For what it is worth, I suspect Woolworths is on the threshold of posting a significant profit improvement for 2018-2019. Apart from the turnaround plan, they are well positioned to make huge gains to their wages bill through the penalty rate cuts the came into effect on July 1st. This will show in their hotel, supermarket and Big W divisions.

 

[poverty]

For what it is worth, I suspect Woolworths is on the threshold of posting a significant profit improvement for 2018-2019. Apart from the turnaround plan, they are well positioned to make huge gains to their wages bill through the penalty rate cuts the came into effect on July 1st. This will show in their hotel, supermarket and Big W divisions.

Are you sure about this? Woolworths workers aren't paid award rates they are paid according to an EBA agreement negotiated through the SDA Union. That agreement hasn't changed on July 1st. The staff are not going to be paid any less.

 

[Craton]

FWIW, locally our Big W has closed up shop as at the end of June 2018. One of about 80+ Big W stores closed nationwide I believe.
No amount of lease negotiations nor the fact that the store has never traded at a loss (from a reliable source - its who you know *wink*) stopped this closure.

When our store reduced or stopped having paint, hardware, auto products, outdoor and more, no doubt due to Masters (closest Masters was 330km away), the writing was on the wall. Anyways, it always comes down to the bean counters whims and bugger the local economy and the people.

As far as I'm concerned, again here locally, is that all Woolies has done is left the door wide open for a competitor to fill the void. Oh, and if they think we will buy from the Big W online site, think again. The cost may be attractive but freight/shipping costs is always a deal killer due to distance. I, like many fellow locals I'm sure, will travel either the 330km or 500+km to our closest major shopping centres and avoid Big W like the plague.

 

[kid hustlr]

Pretty tough environment right now and I stress that my stats say I'm not great at these type of trades but possibly a bit of demand coming into the defensive bell weather security that is WOW

 

[sptrawler]

Has anyone any info on the buyback, I only have sketchy info and am thinking of putting the lot up, as it is in the smsf.
Any thoughts appreciated, not home until Wednesday, so info would be appreciated.

 

[sptrawler]

Oh well, put my WOW up for buyback, now watch the market crash.

 

[sptrawler]

No sooner have Woolies sold off their petrol stations, it sounds like they are going to demerge their hospitality and pokie industry.
It sounds as thought they are trying to become lean and mean, which in this economy seems smart, to me.

 

[PZ99]

Woolies did well during the GFC as people stayed at home to eat.

But they might want to do something about Big W before anything else.

 

[sptrawler]

Woolies did well during the GFC as people stayed at home to eat.

But they might want to do something about Big W before anything else.

I think I read they are closing 30 stores and looking at offloading the rest, I think it is a dead model, the internet is murdering it.

 

[Garpal Gumnut]

I can see Solly Lew or WES doing a t/o on a cashed up WOW after the sale once the imminent GFC hits.

gg

 

[sptrawler]

Well the Big W closures commence.

https://au.yahoo.com/finance/news/big-w-confirms-first-three-stores-close-doors-014216699.html

 

[tinhat]

The old investment thesis was that Woolworths and Coles were blue-chip conservative cash cow dividend payers - "people still need to eat in a recession". Earnings growth = inflation plus net migration, was the analysis I once heard.

Look back over financial ratios of WOW. Up until 2016 return on equity was, year on year, always over 25%. Since then it's been hovering around 15%. Earnings growth was averaging solidly in the double figures up until about 2012, since then it has been single figures only.

Woolworths and Coles net profit margins have always been very thin, but they relied on their duopoly dominance. Those days are over and never coming back. I sold out of my WOW and WES a few years ago.

I tend to buy a lot of clothes and homewares over the internet and a lot of our groceries now come from Aldi. Mind you, as someone transitioning into old fart status, I did pick up some of these recently; which is kind of the point, how much profit is there in selling a $8 shirt or $5 t-shirt. I used to buy second hand shirts from Vinni's or Salvo's but Big W is cheaper!

 

[sptrawler]

The old investment thesis was that Woolworths and Coles were blue-chip conservative cash cow dividend payers - "people still need to eat in a recession". Earnings growth = inflation plus net migration, was the analysis I once heard.

Look back over financial ratios of WOW. Up until 2016 return on equity was, year on year, always over 25%. Since then it's been hovering around 15%. Earnings growth was averaging solidly in the double figures up until about 2012, since then it has been single figures only.

Woolworths and Coles net profit margins have always been very thin, but they relied on their duopoly dominance. Those days are over and never coming back. I sold out of my WOW and WES a few years ago.

I tend to buy a lot of clothes and homewares over the internet and a lot of our groceries now come from Aldi. Mind you, as someone transitioning into old fart status, I did pick up some of these recently; which is kind of the point, how much profit is there in selling a $8 shirt or $5 t-shirt. I used to buy second hand shirts from Vinni's or Salvo's but Big W is cheaper!

Yes, it ain't what it used to be, I bought Woolies at $2.40, it might be time to move them on.

 

[barney]

I bought Woolies at $2.40

…. $2.40

That is a bona fide WOW ….

 

[sptrawler]

…. $2.40

That is a bona fide WOW ….

Not really, it was nearly 30 years ago, when they were spun out of Adelaide Steamships. Lol

 

[barney]

Not really, it was nearly 30 years ago, when they were spun out of Adelaide Steamships. Lol

I still think its impressive …..

 

[Kremmen]

Woolworths and Coles net profit margins have always been very thin, but they relied on their duopoly dominance.

That seems like understatement to me. They grew as they headed towards a duopoly, killing off Franklins and most of the independent competitors. Where can they grow now, with more competitors (Aldi, Costco, etc) entering the market? I don't understand why their price has kept rising and also am thinking of selling out despite the large capital gain. (Not as large a gain as some here, but still purchased under $3.)

 

[barney]

(Not as large a gain as some here, but still purchased under $3.)

Take the rest of the year off

 

[PZ99]

Any buy under $3 is a freehold if you include the divvies

I'd be more inclined to hold going off the restructuring plans over the next decade.

Automation expected to play a big part in this.