CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Woolworths (WOW) stock falls on weak earnings preview

By Debabrata Das

05:28, 14 December 2021

Entrance to a Woolworths store in Sydney
Entrance to a Woolworths store in Sydney – Photo: Shutterstock

The stock price of Australian retailer Woolworths fell sharply after it flagged lower earnings from its domestic food business as the lifting of lockdown meant people were not stocking up.

Further, the retailer also highlighted that its earnings for the July to December 2022 period will be impacted by Covid-19 related costs of AUD150m ($106.56m) as well as supply chain disruptions costing an additional AUD60m to AUD70m.

“The first half of FY22 has been one of the most challenging halves we have experienced in recent memory due to the far-reaching impacts of the Covid Delta strain and its impact on our end-to-end stock flow and operating rhythm,” Brad Banducci, Woolworths Group CEO, said in a statement on Tuesday.

EBIT to be lower

The company expects earnings before income tax (EBIT) to be between AUD1.19bn and AUD1.22bn for the July-December 2022 period, down from AUD1.31bn last year.


16,057.40 Price
-0.060% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8


1,993.66 Price
-0.620% 1D Chg, %
Long position overnight fee -0.0199%
Short position overnight fee 0.0117%
Overnight fee time 22:00 (UTC)
Spread 0.50


42,432.60 Price
-3.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Oil - Crude

71.01 Price
-0.510% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.040

According to the company, following the easing of lockdowns in New South Wales and Victoria in October, sales in its Australian food business have moderated with customers returning to “normal shopping habits”.

On a more positive note, the company expects direct and indirect Covid-19 costs to reduce in the January-June 2022 period. It added that the business is expected to return to a “more sustainable, predictable and productive operating rhythm” if there are no further widespread Covid-19 disruptions.

Stock price recovers marginally

Woolworths stock price had fallen nearly 10% on Tuesday after the retailer released its trading update. Though it recovered partly, the stock was still down 7.4% during mid-afternoon trading at AUD37.52.

Read more: Woolworths (WOW) in 0m takeover bid for API

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading