Insights

Here’s why the Woolworths (ASX:WOW) share price is up 10% since May

The retail giant has enjoyed a positive couple of months.
The post Here’s why the Woolworths (ASX:WOW) share price is up 10% since May appeared first on The Motley Fool Australia. –

Woolworths Group Ltd (ASX: WOW) shares climbed higher yesterday. By market close, the Woolworths share price was trading at $38.21, 0.53% higher than the previous day.

In fact, the retail giant’s shares have climbed by around 10% since 1 May. Let’s take a closer look at what Woolies has been up to over the last two months.

New ‘dark store’

The company has announced plans to open a dark store in a location in Southern Sydney. A dark store only takes online orders, with no shop-front per se.

Woolworths intends to develop similar stores dotted throughout Sydney as the company pivots to prioritise its e-commerce division.

Woolworths’ share price jumped on the news, hitting an intraday high of $38.33 during yesterday’s session.

The Endeavour demerger

Woolworths commenced and completed the $10 billion demerger of its Endeavour drinks business in June. The Woolworths share price jumped almost 3% on 28 June upon completion of the demerger.

Shareholders voted overwhelmingly in favour of the plan, with 99.85% of the votes cast in favour of the demerger.

The deal is also set to return between $1.6 billion and $2 billion in cash to Woolworths shareholders via dividends.

Following the demerger, Woolworths chief executive Brad Banducci said:

We are excited to focus on our retail ecosystem with our customers and everyday needs at the core, while at the same time partnering with Endeavour Group. We are committed to creating better experiences together for a better tomorrow for all our stakeholders

As a result of the demerger the original Woolworths shares were split into two ASX-listed companies with the newly formed Endeavour Group Ltd (ASX: EDV).

Since the transaction was announced in May, investors have pushed the Woolworths share price up from $34.81 to yesterday’s $38.21.

PFD acquisition

Back in June, the Australian Competition and Consumer Commission (ACCC) announced it would not oppose Woolworths’ acquisition of PFD Food Services.

PFD is one of Australia’s premier foodservice distributors, and Woolworths received the green light for its planned $552 million investment in the company on 11 June.

With this, Woolworths targeted a 65% stake in PFD, and the transaction was finalised at the end of June.

Speaking on the deal, Woolworths’ Banducci said:

This investment is a logical adjacency for Woolworths Group and further supports the evolution of the group into a food and everyday needs ecosystem.

Since the transaction was finalised on 28 June, the Woolworths share price has climbed from $37.85 to today’s trading.

Woolworths share price snapshot

The Woolworths share price has had a choppy ride over the past 12 months, posting a return of around 12%.

Year to date, Woolworths shares have returned 10%, which has lagged the S&P/ASX 200 Index (ASX: XJO)’s return of ~11.3% this year.

At the current market price, Woolworths has a market capitalisation of $48.4 billion.

The post Here’s why the Woolworths (ASX:WOW) share price is up 10% since May appeared first on The Motley Fool Australia.

Should you invest $1,000 in Woolworths Group right now?

Before you consider Woolworths Group, 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 Group wasn’t one of them.

The online investing service he’s run for nearly 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 May 24th 2021

More reading

Woolworths (ASX: WOW) share price up amid new ‘dark store’ plans
Are the 10 highest paid ASX 200 CEOs worth their paypackets?

ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat

These 3 ASX 200 shares were the most heavily traded today

Where to next for the Woolworths (ASX:WOW) share price?

The author Zach Bristow has no positions 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 Bruce Jackson.

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
Trade The US Market With ZERO Brokerage* + FREE Access To Trading Ideas & Value Analysis Tools. Click Here!