Why did the Woolworths share price smash the ASX 200 in March?

We’re still in March (barely), but we already know that the S&P/ASX 200 Index (ASX: XJO) is most likely heading for an overall loss for the month. The ASX 200 has had a pretty dire month over March, as most investors would be aware.

Despite today’s 0.63% lift for the Index, the ASX 200 is still down a meaningful 1.25% since the end of February. But let’s talk about the Woolworths Group Ltd (ASX: WOW) share price.

Woolworths shares defied the market comprehensively over the month (nearly) just gone. Since the end of February, Woolies shares have risen from $36.92 a share to the $37.88 we are seeing at this point of Friday’s session. That’s a gain worth just over 2.6%, meaning that the Woolworths share price has beaten the broader market by close to 3% over March as it currently stands:

So what happened for Woolworths shares that made this ASX 200 blue chip a safe haven for investors over what was a rather wild month for most shares?

Why has the Woolworths share price smashed the ASX 200 in March?

Well, it’s hard to put a finger on it. There weren’t any major announcements from the supermarket giant over the month.

But we can probably conclude that the half-year earnings report Woolworths delivered back in February probably helped. Investors seemed very impressed with the numbers Woolies put up.

As we went through at the time, these saw the company reveal a 4% rise in sales to $33.17 billion, as well as a 14% surge in net profits after tax (NPAT). To top it off, Woolworths announced that its interim dividend would get a 17.9% boost up to a fully-franked 46 cents per share.

As it stands today, the Woolworths share price is a healthy 3.2% higher than where it was the day these earnings were released. So investors seem to have given this report card a tick of approval. This probably helped hold up the Woolworths share price over the past month.

ASX brokers love Woolies shares right now

Another factor that may have helped keep the Woolworths share price above water is the love it has been receiving from ASX brokers.

Earlier this week, we covered the conviction buy rating that ASX broker Goldman Sachs currently has on Woolies shares. And the $41 share price target that came with it. 

Goldman gave this stamp of approval thanks to “consumer stickiness and loyalty among peers” and a “strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins”.

So this might have helped boost sentiment for Woolies shares over the past month too. In addition, consider that Woolworths is a consumer staples share.

Consumer staples shares are typically thought of as ‘safer’ in times of market stress, given that their customers tend to keep coming through the doors, regardless of the economic weather.

So it’s probably a combination of these factors that helped the Woolworths share price smash the ASX 200’s returns over March. Let’s see how the company does in April.

The post Why did the Woolworths share price smash the ASX 200 in March? 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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