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WOW - Woolworths Group

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WOW doesn't attract me.

Held
Holding

What Matters Today: Three switches which are worth investigating - Market Matters

What Matters Today: Three switches which are worth investigating Market Matters - ASX buy recommendations
marketmatters.com.au
Coles Group (COL) into Woolworths (WOW)?

"This week, the financial press has been inundated with stories about Coles’ and Woolworths’ differing fortunes; after all, their business models are the same. Over the last five days, COL has advanced +9.6% while WOW has tumbled 12.9%, another more than 20% relative performance move, and over the last year, it’s been closer to 30%! At MM, as we don’t own COL, we look at their relationship from a slightly different perspective. When we decide to move down the “risk curve”, consumer staples often deliver outperformance, hence we consider if WOW has fallen too far &/or is COL too expensive. One thing is for sure – the momentum traders will have been buying COL ahead of WOW. We’re thinking about what’s next.

Coles (COL): It is delivering operationally, including at the start of this financial year. It’s now trading at an Est P/E of 24.5x FY26 post-result, more than 10% above its average valuation of the last 5 years. The stock is forecast to yield around 3% fully franked over the next 12 months. There are no alarm bells here for MM in a rich market; a stock beating expectations should be trading at a premium to recent years.

Woolworths (WOW): Continues to struggle compared to COL, including at the start of this financial year. It’s currently trading at an Est P/E of 22.7x FY26, less than 10% below its average valuation of the last 5 years. The stock is forecast to yield, similar to COL, around 3% fully franked over the next 12 months. This is not flashing as particularly cheap to MM; supermarkets can be akin to oil tankers, and they take time to turn around, even with retail veteran Amanda Bardwell now at the helm.

We see no reason to bang the WOW drum over COL at this stage, with the former on course to test its COVID low – nothing contrarian here.
MM prefers COL to WOW at this stage"

DAILY - shouldn't be below $30 support, needs fast recovery
 
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Dick Smith Electronics ( where i first understood how dysfunctional WOW was ) Masters Hardware , the drinks arm ( EDV ) i am guessing the core issue is each section is their own little fiefdom , the probable path forward will be another divestment , because WOW seems to be totally oblivious to cross-selling between arms where appropriate ( and profitable )

but another review/restructure let's see what happens this time
 
farmerge said:
Down, Down, Down looks as if the wrong business chain is sprouting this.
Click to expand...
now my earlier statement doesn't seem to be very big news ... until you understand that i worked for WOW for a few years starting in the middle of ... 1972 !

when they were clearly the second player , at the time

so WOW climbed to the top , crippling COL( Coles/Myer back then ) and then started resting on their laurels ( which unfortunately wasn't bound with thorns )
 
DannyB0000 said:
Buy the dip opportunity with WOW. I can see Woolies going broke anytime soon. Bought a parcel at about 28.30 through my super fund today
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maybe sub $20 for me , but would have to SHOW improvement not talk and draw pretty presentations of a potential improvement

Corbett ( a previous CEO ) was invited to leave after a way better performance

don't forget about those black swans circling ( the whole global economy )
 
divs4ever said:
so WOW climbed to the top , crippling COL( Coles/Myer back then ) and then started resting on their laurels ( which unfortunately wasn't bound with thorns )
Click to expand...
From a long term perspective it's not hard to foresee further falls in my view:



That's not to say it necessarily will continue to fall, but it's certainly plausible in my view.
 
@ $27.15
Plunged to a 52 week low today and it's still not worth buying by my crude measures (it's almost 7X book value)
Looking at the decade chart I believe WOW will go lower. Rounding top maybe? Sloppy double top?

Held
Holding

DAILY
 
finicky said:
@ $27.15
Plunged to a 52 week low today and it's still not worth buying by my crude measures (it's almost 7X book value)
Looking at the decade chart I believe WOW will go lower. Rounding top maybe? Sloppy double top?
Click to expand...

I haven’t looked at WOW for years. The destruction of value is atrocious on a chart going back to the 1990’s.

I initially didn’t believe you @finicky when you said it had further to fall. It has lost one third of its sp in the last 3 years. If there is a market crash then $20 or even $15 is possible.

Has it been a consistent dividend payer in hard times?



gg
 
Woolworths is a crap business. I hate retail and would never invest in it but Woolworths is in a pretty bad state. Their logistics is shot; trucks turn up to stores late, too much of the wrong stock arrives and not enough of what's needed. Shoplifting is out of control, too much product is dumped, stock is double or triple handled due to poor ordering and organisation. Waste is everywhere.

Margins are slim. The one store I'm familiar with does over $900,000 in sales a week but only manages to squeeze out around $30,000 profit. The store is dirty, and disorganised. Machinery and freezers keep breaking down. Things stay broken until they have to be fixed.

There are better businesses to invest in.
 
am a very infrequent visitor to WOW stores in the recent decade , but in the early/mid 1970's i worked at one of their distribution centers , it those days mediocre middle management was the issue

it sounds like a return back to the 'bad old days ' , the stores i have visited in recent years had cluttered aisles ( depending on camera placement and staff monitoring them ) may enhance shop-lifting and the pursuit of automated checkouts would not hinder such

i hold WOW ( 'free-carried' ) a small remnant of an inherited parcel
 
Garpal Gumnut said:
Has it been a consistent dividend payer in hard times?
Click to expand...
from my DRP records ... yes , even if some dividends have been less than exciting ( that is between April 2012 to the current time )

add to that WOW divested the shopping centre REIT ( now RGN ) and the drinks arm ( EDV )

so not totally suck-worthy , but it does find new ways to stumble ( over the last decade ) too ambitious for it's own good perhaps ?
 
ShareSuccess said:
Looks like i made a Bad Decision & got in Too early,But i'll just have to average Down in the hope the New CEO will get her act Together & pull a Rabbit out of her Hat
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maybe ... but Brad the superstar was supposed to be 'that breath of fresh air '

i will watch the new CEO with lowered expectations , but maybe she will just 'clean house ' there ( and reduce the missteps )

bad decision , that will depend on the general economy , is it booming or struggling ?

i hold several retail companies ( despite my belief 'retail is dead ' ) and it is tough going , but the genuinely tough survive and thrive ( BTW i LOVE to 'free-carry' retailers ie get into a 'no cash on the table position' )

but gee would i throw new cash at extra WOW ?

not very likely currently , my new cash is more likely to go to COL or MTS if the sector comes under heavy stress

( in saying that i added extra BAP today )
 
Update on underpayments proceedings

i hold WOW and COL

a similar ann. from COL is slightly easier reading

i doubt COL will drop enough to tempt me to add ( my preference of the two ) and i suspect neither will WOW

but dip-buyers might have an opportunity
 

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ShareSuccess said:
Looks like i made a Bad Decision & got in Too early,But i'll just have to average Down in the hope the New CEO will get her act Together & pull a Rabbit out of her Hat
Click to expand...

Good luck.

Results and Presentations

Click here to view Woolworths Group's results and presentations.
www.woolworthsgroup.com.au

Woolworths Group CEO, Amanda Bardwell, said: “After a highly disrupted first half, we have taken action to reposition the Group for long-term sustainable growth. While there is more to do and current trading remains below our ambition, we have seen some early positive signs with improving customer scores. ”In February, we highlighted three focus areas for 2025. Most important was getting it right for our customers. We have invested in lowering shelf prices, increasing specials and absorbing cost price increases on everyday items and made our pricing clearer and easier to understand. Excluding Tobacco, average prices have declined year on year for the sixth consecutive quarter. Value for Money continues to improve and our focus on availability and elevating retail execution is also contributing to momentum in customer scores. “We have simplified the way we work with key management changes and an organisational structure better aligned to our strategic priorities. We are on track to deliver $400 million in above-store savings by the end of calendar 2025. We are committed to being a lower-cost business with a strong ongoing productivity agenda and a discipline of making every dollar count across Woolworths Group. “We also took steps to unlock the full potential of the Group. We announced the closure of the MyDeal customer website and consolidated a number of businesses internally to improve performance and elevate focus on our cornerstone Food business. New Zealand Food’s transformation delivered an improved performance in F25 while BIG W was below expectations with Clothing detracting from improvements in Play and Home. We will begin to transition BIG W to its own fit for purpose technology platform while remaining focused on improving the performance of the business. “In F26 we expect to return to profit growth following a disappointing F25. We will continue to rebuild customer trust through compelling value and retail execution excellence, simplify the way we work and become a more focused, lower-cost retailer with a differentiated Food offer at our core. Some of this will take time but I am confident that the strength of our brands, assets and team can see us deliver a much-improved performance. I also wanted to acknowledge and thank our team for their efforts during a period of significant disruption and change.” ​
 
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