Woolworths To Close Down 30 BIG W Stores In Next Three Years

Woolworths To Close Down 30 BIG W Stores In Next Three Years

Australia’s leading Retailer, Woolworths Group (ASX: WOW) is going to close down 30 BIG W stores in the next three years. BIG W is one of the most recognized and trusted brands of Woolworths Group.

In an announcement made on 1 April 2019, Woolworths announced that after concluding the BIG W network review it has identified around 30 BIG W stores which it will close in the next three years and two distribution centres (Monarto, SA and Warwick, QLD) which will close in F21 and F23 respectively.

It is expected that the closing down of stores which are identified in the BIG W review, will lead to a more robust and sustainable store and distribution centres network which will contribute to BIG W’s profit.

It is expected that the company will incur a P&L charge of around $270 million for closing down the stores. As part of its reviews, the company has identified one-off pre-tax charge of approximately $370 million and cash cost of around $250 million, in relation to the store exits.  Most of the cash outflow from closing down of the stores is expected to occur in FY 2021 & FY 2022.

In the second quarter of FY 2019, BIG W reported comparable sales growth of 5 percent, driven by sales in online and lower margin categories. BIG W’s sales for the first half of FY 2019 were $2.1 billion, which is 2.7 higher than the previous year with comparable sales increasing by 3.8%.

While providing its half-year results, the company foreshadowed the recovery in trading for BIG W and it also noted that the earnings improvement for BIG W is taking longer than planned.

Due to the strong transaction growth in the third quarter of FY 2019, BIG W reported comparable sales growth of 6%, regardless of which, the profit improvement is slower than planned.

Due to ongoing discussions with landlords, the company has not yet released the details of possible store closures. Meanwhile, all stores and distribution centres are trading normally.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. At the time of writing, i.e., on 2nd April 2019, the stock of the company was trading at a price of A$30.850, down 0.74% during the day’s trade with the market capitalisation of ~A$40.95 Bn. The counter opened the day at $31.280 and touched a day’s low of $30.610 with a daily volume of ~ 16,123,864. The stock has provided a year till date return of 6.62% & also posted returns of 11.40%, 6.62% & 7.80% over the past six months, three & one-month period respectively. It had a 52-week high price of $31.480 and touched 52 weeks low of $26.180, with an average volume of ~2,922,457.

Recently, the company announced an Off-Market Buy-Back after completing the sale of its Petrol business.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

Top 25 Dividend Stocks report for April

People prefer a dividend stock in their portfolio as it possesses the feature of compounding. Compounding means that the earning which is generated through these dividend stock will get reinvested and will eventually create earnings from earning. More precisely, the dividend generated from these dividend stock will get reinvested to buy another set of a share of the dividend stock which results in giving a higher dividend.

Click here to download your top 25 dividend stocks report!

6 Cannabis Stocks under Investor’s Limelight…

Cannabis companies that sell both medicinal weed and recreational pot. Marijuana stocks to look at. Marijuana mergers and acquisitions. Dispensary data analytics. Upcoming marijuana IPO’s Those phrases have become increasingly common as marijuana legalization spreads.

Global spending on legal cannabis is expected to grow 230% to $32 billion in 2020 as compared to $9.5 in 2017, according to Arcview Market Research and BDS Analytics. As of June 29, 2018 the United States Marijuana Index, despite a lot of uncertainty around regulations, has over the past 1 year gained 71.49%, as compared to about 12% gain seen by the S&P 500.

Click here for your FREE Report