WOW -6.1%: A win for consumers but not for shareholders today, with Woolies stepping up discounting which has forced them to downgrade earnings, WOW now guiding to Australian Food EBIT of $1.48-1.53bn, a ~7% miss to consensus at the mid-point. A rise in online sales has also had an impact on margins, a trend that Goldmans to their credit had highlighted in their recent note on Metcash when they deviated from consensus, the sort of independent thinking that we applaud, even though we were on the wrong side of it. As a good colleague who has been in the markets for 40+ years often says, analysts make sheep look like independent thinkers!
- A soft update and the shares rightly fell.
MM remains neutral WOW ~$31
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