Woolworths – Market Expectations Factor in A Significant Reversal of Fortunes in FY17
On 25 July, Woolworths provided a trading update that guided the market slightly lower on FY16 earnings. Given the negative sentiment surrounding the company, this was viewed as a positive outcome, and Woolworths’ share price appreciated 8.2 per cent on the day. Since then, Woolworths’ share price has drifted back 4 per cent, but remains well above its recent low of A$20.50 on 6 July.
Stuart Jackson is the Portfolio Manager of The Montgomery [Private] Fund. To invest with Montgomery domestically and globally, find out more.
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Martin
:
I note that Sally Macdonald, former CEO of Oroton and highly regarded by Roger Montgomery, took the helm at Big W in January. She is making some dramatic changes especially with regards to product sourcing. Do you believe she can make a meaningful difference to the business and at least stop the bleeding? If so, could it make a material difference to WOW’s numbers?
Roger Montgomery
:
Hi Martin,
I reckon/guess Woolies will want to sell BIG W at some point so the difference it will make may only be to the price they receive.