Why Bunnings has become the new Coles for investors
Bunnings is the new Coles – its earnings and its outlook is the now Wesfarmers’ major performance driver.
The trouble is Bunnings sales growth looks to be slowing with fourth quarter sales growth of 4.9 percent down from 7.7 per cent and a note of caution from Wesfarmers that Bunnings sales growth will moderate in the first half of 2019.
Sure, Bunnings Australia and New Zealand had a very good 2018 but now is not a good time for it to lose some of the sales gloss.
It used to be that the main game for Wesfarmers investors was Coles – the focus of most attention.
Once Coles is excised from Wesfarmers and various other businesses within the larger conglomerate, like the coal assets, are sliced off, the contribution to group earnings from Bunnings becomes larger and more important. The sensitivity to Bunnings performance is all the greater. Sydney Morning Herald – Read more…