WOOLWORTHS GROUP LIMITED
| Revenue | A$71.5B |
|---|---|
| Operating income | A$6.1B |
| Operating margin | 8.5% |
OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong operational recovery is offset by a weak FY19 start and unresolved execution risk.
HOLD: FY18 was strong, with sales up 3.4%, EBIT up 9.5% and continuing-operations NPAT up 12.9%, while net debt fell to $1.2 billion.
The buy case is improved execution and cash generation, but Australian Food started FY19 at only 1.3% sales growth, Big W lost $110 million, and competitive pressure plus rising investment costs make near-term earnings momentum unproven.
- Australian Food
- Big W Turnaround
- Competitive Pressure
- Digital And Online
- Supply Chain Automation
- Capital Management
Near term
Australian Food must recover from 1.3% sales growth in the first seven weeks as plastic-bag disruption and Coles promotions fade.
The Christmas trading period is critical for Big W, where management offers no quantified path from the $110 million FY18 loss.
New Zealand EBIT needs to stabilize after an 8.2% decline while digital and service investment continues.
Endeavour Drinks faces a more competitive second half and higher supply-chain costs.
Longer term
MSRDC is a roughly $350 million automation investment with benefits described only as tens of millions and not yet proven operationally.
Rising depreciation, online growth, energy costs, card fees and likely wage inflation could absorb operating leverage.
The supermarket moat is being tested by Coles promotions and increasingly competitive online pricing, with Amazon's impact still unresolved.
The turnaround thesis depends on sustained improvements in customer experience, stock loss, digital fulfillment and store productivity.
Red flags
Management attributed the sharp sales slowdown to several overlapping factors and could not quantify each contribution.
Management explicitly said the plastic-bag change caused more short-term cost and disruption than expected.
CODB has structural cost growth, while management declined to forecast whether it will grow below sales.
Big W remains highly leveraged to the Christmas quarter and has no stated breakeven timetable.
MSRDC benefits are unquantified and the company will wait for proof before committing to additional sheds.
Recommendation history
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
Earnings transcripts
- Issuer webcast
Webcast
WOOLWORTHS GROUP LIMITED
- Issuer IR
FY 2018 earnings call transcript
WOOLWORTHS GROUP LIMITED
- Issuer IR
Q3 2018 earnings call transcript
WOOLWORTHS GROUP LIMITED
- Issuer webcast
Full Year Earnings Result F26
WOOLWORTHS GROUP LIMITED
- Issuer webcast
Half-Year Earnings Result F25
WOOLWORTHS GROUP LIMITED
- Issuer webcast
Full Year Earnings Result F24
WOOLWORTHS GROUP LIMITED