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.
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.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.
Yes, it ain't what it used to be, I bought Woolies at $2.40, it might be time to move them on.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!
Not really, it was nearly 30 years ago, when they were spun out of Adelaide Steamships. Lol…. $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
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.)Woolworths and Coles net profit margins have always been very thin, but they relied on their duopoly dominance.
(Not as large a gain as some here, but still purchased under $3.)
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?