Woolworths says share drop is ‘over-reaction’
Investors have over-reacted to its soft first-quarter sales result
Investors have over-reacted to its soft first-quarter sales result and trading conditions have improved in recent weeks, Woolworths says. The shares have plunged almost 14% since November 3, when it said sales in the three months through September increased by a disappointing 3% – one of its worst quarterly results in years. The company’s Countdown chain competes with Foodstuffs in New Zealand and Wesfarmers-owned Coles and the Metcash-owned IGA in Australia.
“The market appears to have drawn conclusions about the company’s outlook that your board does not share,” chairman Ralph Waters told the company’s annual shareholder meeting last week. He reiterated guidance for 4-7% growth in net profit this fiscal year.
Woolworths shares rose 1.7% after his speech was posted on the ASX.
The coming weeks will be crucial as shoppers prepare to spend on food and other goods at Christmas.
NBR Food Industry Week
Fri, 05 Dec 2014
Fri, 05 Dec 2014
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Woolworths says share drop is ‘over-reaction’
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