Woolworths

Woolworths (WOW)

Fri, 13/06/2008 - 12:19

Stock Code

WOW

Stock Exchange

Australian Securities Exchange

Woolworths Limited (WOW) is an Australian-based retail group specialising in the general merchandise, food and specialty retailing through its operations in different chain stores. This company has a widespread operation in Australia and New Zealand managing around 3,000 stores located in the two countries. Included in these 3,000 stores are the 965 supermarkets solely operated and managed by the Woolworths and Safeway brands in Australia. Stores under the brands Foodtown, Woolworths and Countdown in New Zealand are also under the activities and operations of Woolworths Limited.

Woolworths to Reveal Second Quarter Sales Figures


Australia based retail group Woolworths (WOW) is expected to come up with solid indication today regarding how the retail sector was priced during the Christmas trading period when the company will present its second quarter sales figures. Analysts are assuming that the retailer might report a 6.5 percent sales growth apart from petrol, towards the lower end of the forecasts of the company sales growth within the range of 5 and 9 percent in the current financial year.

Independents Resists Woolworths Entry


In fear of getting wiped out from the business, the independent hardware store operators have urged the competition regulator to block Woolworths (WOW) from entering the home improvement industry. Retailers Association, which represents more than 5000 entrepreneurs of the industry stated that it will not be a wise thing to allow the hardware industry to turn into something like a super market sector.

Woolworths to Face Tough Time in Hardware Business


According to Merrill Lynch analyst David Errington, Woolworths (WOW) might lose as much as $623 million within five years after kicking off with its new big-box hardware store project which is scheduled to be launched in late 2011. Woolworths and Lowe’s- the US ba'sed hardware company is expected to introduce a chain of warehouse-sized hardware outlets in the market which might challenge the dominance of Wesfarmers owned Bunnings, which is the current market leader in the industry.

Woolworths to Defy Bunnings Dominance


The Australia based retail group Woolworths (WOW) has revealed its plan to go for an assault over the country’s $24 billion worth of hardware industry. The plan includes a tie-up with US based group Lowe’s- the second biggest company of the world and also a roll-out of stores at a large format aimed at launching a strike over Wesfarmer’s Bunnings which is currently the market leader.

Woolworths Enjoys Sales Growth despite Economic Downturn


Despite the global economic crisis, Woolworths (WOW), a renowned Australia based retail group has recorded a sales growth of 7.5 percent for this year till June 30 due to a turnover in clothing and consumer electronics which had seen a double digit growth.

Woolworths Meets Its Annual Forecast


Australia's biggest retailer, Woolworths Ltd., met its full year profit forecast even as the country reels under rising fuel prices and escalating borrowing costs which slowed down the fourth quarter sales to just 7.5 percent. Earnings before interest and tax (EBIT) is expected to grow faster than sales as net profits seem to fall in the growth range of 21 percent to 25 percent. The retailing giant marked rise in total sales for 53 weeks ended June 29 to $47.035 billion or 10 percent higher. On normalised basis, that excludes extra trading week in the year, the sales were up by 8.7 percent.

Woolworths Kickback Fraud


A 57-year-old former senior executive at Woolworths (WOW) has been charged for taking $3.7 million worth of kickbacks from awarding $37 million contracts a decade ago. A spokesperson from Woolworths said that the fraud charges were related to the retailer's MIS division (management information systems) before 1999. The former executive spent 9 years at WOW. The investigations, code-named Strike Force Whittlesford, have been following the worldwide money trait since 1999.

Defensive Stocks for Uncertain Times


I caught a discussion on TV the on Tuesday on the Midday report on the ABC about possible stock picks considering the current global and local economic situation. The expert (sorry didn't catch his name or which firm he was from) said its time to go safe and invest in "defensive stocks" (keyword = invest!)

The newsreader asked him what was his stock picks and here they are - defensive stocks for uncertain times:

  • Australian Securities Exchange (ASX) - because the exchange has a monopoly

Woolworths Limited Update


Woolworths Limited (WOW) has a Buy 1 recommendation and a price target of $30.30 per share from sharemarket analyst UBS. All divisions of Woolies bar Hotels reported stronger growth rates than those of the 2Q. Food & Liquor posted 6.6% like-for-like (LFL) growth despite declining inflation. BigW was the standout with LFL up 6.0% after adjusting for benefit from earlier Easter. This compares to 1.1% last quarter. NZ grew 4.9%, Hotels 1.5% and Consumer Electronics (CE) 7.5%. WOW confirmed FY07 sales guidance of 8-12% growth.The analyst has put through minor upgrades to some of our 4Q LFL forecasts to reflect the momentum we see across the divisions. They believe WOW & MTS will continue to benefit from disruption at CGJ. Our 12.4% sales growth forecast for FY07 is above guidance. WOW confirmed their interest in CGJ's general merchandise assets. Officeworks & Target hold most appeal in our view. The analyst thinks WOW would have less interest in Kmart. They note HVN delivered higher 3Q LFL growth (10.8%) than CE despite exposure to the weaker growth furniture category. Their price target for Woolworths Limited is derived by applying the cost of equity less dividends to our valuation. The free cash flow yield is rising as working capital & capex fall. This justifies the high PE in our view. WOW remains one of the sharemarket analyst's top picks in the sector along with HVN, BBG & MTS.

Meanwhile another analyst, Citigroup Investment Research has made some observations about Woolworths Limited. Woolworths 3Q07 sales show market share gains: WOW reported 3Q07 sales of $10.6 billion, growth of 8.8%. Volume growth in Food & Liquor accelerated in the quarter. Citigroup Investment Research (CIR) expect WOW's market share gains to continue until the end of 2007 given the problems at Coles. The analyst has slightly lowered its FY07e EPS by 0.2% and increased FY08e by 0.5% to reflect the timing of store openings. Market share gains accelerate; Food & Liquor comparable store sales growth accelerated to 6.6%, despite a reduction in inflation. The analyst estimates 1pp of the growth was a result of customers defecting from Coles and Bi-Lo stores. In addition, higher sales from the Action stores and the ramp-up of recently opened Dan Murphy's stores are driving comp store growth. Big W revival: Big W reported comp store sales growth of 6.0%, up from 1.1% in 2Q07. The dramatic recovery reflects WOW's decisive action to reduce the ranging in poor performing hard good categories and increase the focus on grocery items. Hotels gaming revenue declines to continue: Comparable gaming revenue is falling given QLD smoking bans introduced in mid-2006. Further bans will come into force in NSW and Victoria in mid-2007 and the analyst expects further deterioration in gaming revenue. Coles interest confirmed: Woolworths Limited confirmed it has lodged an expression of interest for Coles' general merchandise assets. The company is in a strong position given the PE premium for its shares and strong balance sheet. While Officeworks is a strong strategic fit, there is greater risk if WOW acquires Target, given fashion risk.

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