Why is the Woolworths share price sliding lower today?

Woman thinking in a supermarket.

Woman thinking in a supermarket.

It’s looking like the S&P/ASX 200 Index (ASX: XJO) is on track to post something of a recovery so far this Thursday. After a pretty rough week, the ASX 200 has gained a healthy 0.21% so far today. But let’s talk about the Woolworths Group Ltd (ASX: WOW) share price.

Woolworths shares seemingly didn’t get an invite to this ASX 200 party. While the Index is healthily in the green today, Woolworths shares are nursing a fairly hefty loss. The supermarket giant ended yesterday at $36.77 a share.

But today, Woolies shares are trading at $36.04 at the time of writing. That’s a good 1.99% below where this blue-chip share finished up at yesterday.

So why does it look like investors are singling out Woolworths shares for punishment this Thursday?

Well, they’re not really. See, Woolworths shares are falling today because this ASX blue chip has just traded ex-dividend.

Last month, Woolworths revealed its latest earnings report to investors, covering the six months to 31 December 2022. As we covered at the time, these results were well-received by the market. Woolworths reported sales growth of 4% to $33.17 billion.

The company’s earnings before interest and tax (EBIT) rose by an even larger 18.4% to $1.64 billion, while net profit after tax (NPAT) was up 14% to $907 million.

This enabled Woolworths to declare a fully franked interim dividend of 46 cents per share for the half. That was a pleasing rise of 17.9% over last year’s interim dividend of 39 cents per share.

Woolworths share price falls as company trades ex-dividend

But, as we warned on Tuesday, eligibility for receiving this dividend is now closed for new investors. That’s because Woolworths has just traded ex-dividend. When a share goes ex-dividend, it cuts off new investors from receiving an upcoming dividend.

Any shareholder who owned Woolworths shares as of yesterday’s close will be receiving this latest 46 cents per share dividend. But any investors who buy Woolies today onwards will not be seeing this next paycheque from the company.

As such, we have just seen Woolworths share become nominally less valuable, reflecting this dividend getting cut off. So it’s no surprise to see the Woolworths share price retreat today, demonstrating this fall in value. This is typically what we see when an ASX share trades ex-dividend.

Eligible Woolworths investors can now look forward to receiving this latest dividend next month on 13 April.

In the meantime, the Woolworths share price right now gives this ASX 200 blue chip share a dividend yield of 2.75%.

The post Why is the Woolworths share price sliding lower today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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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