Woolworths turnaround to be ‘slow and long’ say investors

 In Australia, NewZealand, Woolworths
Fund managers say the worst is not over for Australia’s largest retailer, Woolworths, and that its supermarket margins could fall below 5 per cent – dragging down earnings across the group for another year or two.
"I think the journey of recovery will be a slow one," Ausbil Dexia’s head of equities, Paul Xiradis said. "I don’t think it will recover strongly."
Mr Xiradis believes Woolworths’ earnings will hit a base in 2017, while some fund managers and analysts see earnings declining in 2017 and 2018 before starting to recover in 2019.
Australian food and liquor margins, which plunged 222 basis points to 5.2 per cent in the December half, dragging earnings down 32 per cent, could fall to 4.8 or 4.9 per cent as Woolworths cut prices to remain competitive with Coles. Sydney Morning Herald – Read more…

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