Woolworths share price wilts today amid ‘volatile and challenging’ outlook

The Woolworths Group Ltd (ASX: WOW) share price is down 3.5% today.

Woolworths shares closed yesterday trading for $37.40 and are currently trading for $36.11.

Investors are pushing down the Woolworths share price following the release of the retail giant’s full-year results for the 12 months ending 30 June.

Here’s why.

What are ASX 200 investors considering?

The FY22 results certainly weren’t bad.

Group sales came in at $60.85 billion, an increase of 9.2% from the prior year, while net profit after tax (NPAT) edged up 0.7% from FY21 to $1.51 billion.

Earnings before interest and tax (EBIT) went the other direction, slipping 2.7% from the prior year to $2.69 billion.

Commenting on the FY22 results, Woolworths CEO Brad Banducci said, “The extremely challenging operating environment caused by supply chain disruptions, product shortages, team absenteeism and flooding led to an inconsistent customer experience and a financial performance that was below our aspirations for the year.”

So, what about the year ahead?

It looks like the Woolworths share price isn’t coming under pressure from those results so much as from the outlook for FY23.

“We expect the trading environment to remain volatile and challenging due to endemic COVID disruptions, ongoing supply chain challenges, higher costs across our business and cost-of-living pressures for our customers,” Banducci said with an eye on the year ahead.

Woolworths expects food inflation to persist into FY23, which could continue to throw up headwinds for the share price.

Initial results from the new financial year show a 0.5% drop in total sales for the Australian food business for the first eight weeks of FY23, while total sales in the New Zealand food division over the eight weeks are down 1% year on year.

Woolworths share price snapshot

The Woolworths share price is down 6% in 2022. That compares to a year-to-date loss of 7% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Woolworths share price wilts today amid ‘volatile and challenging’ outlook appeared first on The Motley Fool Australia.

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More reading

• Woolworths share price on watch as sales leap 9% to $61 billion
• 5 things to watch on the ASX 200 on Thursday
• Earnings preview: Here are the ASX shares reporting today
• Looking to buy Woolworths shares? Here’s what to watch in this week’s earnings results
• Earnings preview: Here are 3 ASX 200 shares reporting this week

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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