Reporting Season Wrap: Retail & Supermarkets
Well known headwinds of higher competition and weak consumer spending remain and the recent updates from the two majors were weak Key points:
- The first report from Coles (ASX:COL) as a separate entity and the same pressures persist. Weak margins and the need to spend up on new distribution centres will remain an issue for some time
- Woolworths (ASX:WOW) fell ~5% on their 1H result with cost pressures continuing to bite. With Coles spending money to become more competitive and other entrants coming into the market, we find it hard to justify WOW’s premium PE. Metcash (ASX:MTS) reports on Monday
- Retailers were the consensus ‘sell call’ leading into reporting season and while results were soft overall, they weren’t the disaster that was being muted beforehand
