Woolworths Group Ltd (ASX: WOW) is facing a fresh investigation from the Fair Work Ombudsman after the company admitted it underpaid employees.
Woolworths shares closed the session at $35.68 today, a 1.36% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) climbed 0.62% today.
Let’s take a look at what the company revealed today.
Woolworths in focus
Woolworths has discovered $144 million worth of staff underpayments as part of a payroll review. The supermarket giant revealed the discrepancy in its half-year results today.
The Fair Work Ombudsman (FWO) will launch an investigation into the underpayments, The Australian reported today. This is on top of the legal action the ombudsman launched against the company in June 2021.
In its half-yearly results presentation on Wednesday, CEO Brad Banducci apologised for the findings. He said:
We are disappointed to have identified further inadvertent underpayments and unreservedly apologise to our affected team members.
We will continue to fix issues when we identify them and introduce the right controls to prevent them from happening again.
This latest discovery takes the total underpayments to employees to at least $571 million, after a separate review uncovered underpayments of $427 million.
The payroll investigation is ongoing with 85% of Woolworths staff reviewed to date. The company hopes to complete the process by the end of 2022.
As covered by the Motley Fool earlier, Woolworths reported a 6.5% drop in net profit in its half-year results today. However, group sales were up 8% on H1 FY21.
The company’s performance was impacted by the COVID-19 pandemic. Despite strong sales growth, Woolworths reported COVID cost the company $239 million.
Woolworths declared a fully-franked interim dividend of 39 cents per share, down 26.4% on the prior corresponding period.
Woolworths share price snapshot
The Woolworths share price has risen 3% in the past year but is down 6% year to date. In the past week, it has gained 4%.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.
Woolworths has a market capitalisation of about $43 billion based on its current share price.
The post Woolworths (ASX:WOW) faces fresh probe as wage scandal balloons to $500m appeared first on The Motley Fool Australia.
Should you invest $1,000 in Woolworths right now?
Before you consider Woolworths , you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Woolworths wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- ASX 200 (ASX:XJO) midday update: Woolworths impresses but Domino’s crashes after earnings miss
- Profit drop: Woolworths (ASX:WOW) share price pushes higher despite ‘challenging’ first-half results
- 5 things to watch on the ASX 200 on Wednesday
- Own Woolworths (ASX:WOW) shares? Here’s what to expect when the company reports this week
- Top brokers name 3 ASX shares to sell next week
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 Bruce Jackson.
from The Motley Fool Australia https://ift.tt/lTkZNi3
Leave a Reply