Woolworths share price dives 7% following Banducci bombshell

The Woolworths Group Ltd (ASX: WOW) share price is taking a beating today.

Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed yesterday trading for $35.87. In late morning trade on Wednesday, shares are swapping hands for $33.48 apiece, down 6.7%.

For some context, the ASX 200 is down 0.4% at this same time.

Here’s what’s spooking investors today.

ASX 200 investors hitting the sell button

ASX 200 investors are pressuring the Woolworths share price today following the release of the company’s half-year results (1H FY 2024) and the unexpected departure of CEO Brad Banducci.

First, a look at those financials.

On the plus side, revenue increased by 4.4% from 1H FY 2023 to $34.64 billion.

And the fully franked interim dividend of 47 cents per share was up 2% from last year’s interim dividend.

On the negative side of the ledger, losses after significant items came in at $781 million. That compares to a profit of $845 million in 1H FY 2023. Most of those losses relate to the $1.5 billion non-cash write-down of the supermarket’s New Zealand business.

Woolies alerted the market to that write-down last month, though the half-year losses are larger than consensus expectations.

Also likely spooking investors today was the company’s warning that sales over the first seven weeks of 2024 (2H FY 2024) have continued to moderate. Management noted that consumers are becoming more cautious, which could see ongoing pressure on the company’s sales.

Woolies says goodbye to Banducci

In a bombshell announcement that’s also likely throwing up headwinds for the Woolworths share price today, CEO Brad Banducci will step down from his role after more than 13 years with the company and more than eight years at its helm.

Banducci will stay on until 1 September. Amanda Bardwell, who’s been leading WooliesX will replace Banducci as the new CEO of Woolies.

“Amanda is a proven leader, business builder and modern retailer. Most recently, under her leadership, WooliesX has gone from infancy in 2015 to a $7bn market leading business,” Woolworths chair Scott Perkins said.

As for Banducci’s departure, Perkins added:

The test of any CEO is to leave the business in much better shape than when they started. On that simple metric, history will judge Brad to have been one of Woolworths Group’s finest leaders.

Woolworths share price snapshot

With today’s big intraday fall factored in, the Woolworths share price is down 11% in 2024.

Longer-term, shares are up 38% over five years, not including the company’s dividend payouts.

The post Woolworths share price dives 7% following Banducci bombshell appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Woolworths shares on watch after CEO exit and $781 million loss
• If I invest $10,000 in Woolworths shares, how much dividend income will I receive in 2024?
• ASX blue chip shares: The best of the best for February 2024
• Buy these top ASX 200 stocks for 18%+ returns
• Will these ASX 200 shares help you retire rich?

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.

from The Motley Fool Australia https://ift.tt/zlLdJH2