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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Woolworths Group Limited    WOW   AU000000WOW2

WOOLWORTHS GROUP LIMITED

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Australia's Woolworths says virus hits pubs, boosts supermarkets

08/26/2020 | 11:25pm EST
FILE PHOTO: People walk past a Woolworths supermarket in Sydney

Top Australian grocer Woolworths Group Ltd said on Thursday annual profit dipped as coronavirus-induced shutdowns wiped out sales of its pubs unit, but an extended upsurge in supermarket sales boosted its shares.

Like grocery chains around the world, Woolworths has benefited from "panic buying" during the COVID-19 outbreak as shoppers stocked up on household essentials to adapt to working and entertaining at home.

All the same, that benefit for Woolworths has been offset by a majority stake in hundreds of pubs which were ordered shut in March, along with most public activity, due to the virus. The company has also been paying back store staff after acknowledging widespread underpayment.

The combination of these factors resulted in a lower underlying net profit of A$1.6 billion for the year to end-June, down 1.2% on the previous year and slightly below analyst estimates - even though pre-tax profit from its Australian supermarkets unit, which generate two-thirds if its sales, jumped 6.3%.

Woolworths shares rose 2.7%, outpacing a broader market gain of 0.6% in morning trading. Since Feb. 20, the day before fears of COVID-19 sent global financial markets into turmoil, the company's shares are down 7.5%, compared to a 14% decline in the overall Australian market.

"Outside of that core Woolworths business things are soft, which you would expect," said Evan Lucas, chief market strategist at InvestSMART.

"Extenuating circumstances have clearly impacted day-to-day operations."

Woolworths didn't give a profit forecast for the current financial year but said supermarket sales were up 11.9% in the first eight weeks.

CEO Brad Banducci said shoppers seemed to be buying more fresh produce, but "we're early days in this process so I wouldn't like to call a very pronounced changed".

During the pandemic, grocers have regularly reported on changing shopper patterns, from surges in purchases of non-perishable essentials like toilet paper and pasta to rushes on baking ingredients.

Woolworths said it expected the profitability of meat to come under pressure after heightened demand increased wholesale costs.

($1 = 1.3816 Australian dollars)

(Reporting by Rashmi Ashok in Bengaluru; Editing by Shounak Dasgupta & Shri Navaratnam)

By Byron Kaye and Rashmi Ashok


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
FEEDER CATTLE?FUTURES (GF) - CMG (ELECTRONIC)/C1 -0.15% 134.2 End-of-day quote.-3.15%
LIVE CATTLE (LE) - CMG (ELECTRONIC)/C1 -0.07% 113.25 End-of-day quote.-0.15%
WOOLWORTHS GROUP LIMITED -0.05% 39.51 End-of-day quote.0.51%
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Financials
Sales 2021 66 934 M 51 827 M 51 827 M
Net income 2021 1 829 M 1 416 M 1 416 M
Net Debt 2021 3 781 M 2 927 M 2 927 M
P/E ratio 2021 26,9x
Yield 2021 2,71%
Capitalization 49 793 M 38 531 M 38 555 M
EV / Sales 2021 0,80x
EV / Sales 2022 0,77x
Nbr of Employees 215 000
Free-Float 99,9%
Chart WOOLWORTHS GROUP LIMITED
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Woolworths Group Limited Technical Analysis Chart | WOW | AU000000WOW2 | MarketScreener
Technical analysis trends WOOLWORTHS GROUP LIMITED
Short TermMid-TermLong Term
TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 42,40 AUD
Last Close Price 39,51 AUD
Spread / Highest target 27,8%
Spread / Average Target 7,31%
Spread / Lowest Target -26,6%
EPS Revisions
Managers and Directors
NameTitle
Bradford Banducci Chief Executive Officer, MD & Executive Director
Gordon McKellar Cairns Independent Chairman
David Marr Chief Operating Officer
Stephen Harrison Group Chief Financial Officer
John Hunt Chief Information Officer
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