Our opinion on the current state of WHL

The sad fall of the Woolworths share (WHL) price was occasioned by the decision of previous CEO, Ian Moir, and his board to buy David Jones in Australia for AU$2,1bn which has now had R12bn written off its original purchase price of R20bn in 2014. The only aspect sustaining the Woolworths group was its food sales. Woollies announced on 14th January 2020 that they had appointed Roy Bagattini, from Levi Strauss, to replace Ian Moir as Group CEO with effect from 17th February 2020. Woolies fashion and clothing section was also not doing that well in a very difficult trading environment. In regard to the recent civil unrest the company said, "Eleven Woolworths stores have been looted and severely damaged with nine of the eleven stores in KZN and two in Gauteng". In its results for the 53 weeks to 25th June 2023 the company reported turnover up 7% and headline earnings per share (HEPS) up 29%. The company said, "Turnover and concession sales from continuing operations (i.e. excluding David Jones) increased by 10.8% for the year and by 9.3% in comparable stores. Sales grew by 9.2% in the second half of the year ('H2' or 'half'). Online sales grew by 9.3%." We recommended that you consider the share when it broke up through its long-term downward trendline. This occurred on 4th May 2021 at a price of 4927c. It has since recovered to 7544c. The current P:E is around 14,36 and the share still appears to have upside potential.