市场见解

How did the Woolworths (ASX:WOW) share price perform in 2021?

Here’s what drove the Woolworths share price last year.
The post How did the Woolworths (ASX:WOW) share price perform in 2021? appeared first on The Motley Fool Australia. –

2021 was an okay year for the Woolworths share price.

The supermarket giant ended 2020 trading at $33.30 and, despite a rocky start to the year, had surged to a 52-week high of $44.06 by June 2021.

However, as of the final close of last year, the Woolworths share price was trading at $38.01. That represents a 14.14% gain for the year.

While that’s a decent result, it only beat the broader market by a nose. Over the course of 2021, the S&P/ASX 200 Index (ASX: XJO) gained 13%.

Let’s take a look back at the news that moved the Woolworths share price last year.

Here’s what drove the Woolworths share price in 2021

The Woolworths share price had a decent run last year, driven by a major demerger, an attention-grabbing takeover offer, and, finally, a disappointing trading update.

Endeavour demerger

Let’s start with possibly the biggest news from Woolworths last year; its multi-billion demerger of its drinks and hotels leg, Endeavour Group Ltd (ASX: EDV).

That saw the company split from many renowned businesses, including Dan Murphy’s and BWS.

The Woolworths share price tumbled 11% on 24 June – the day Endeavour floated – likely reflecting the loss of the branch.

Through the demerger, Woolworths’ shareholders received 1 share in the newly formed company for each share they owned in the parent company.

Financial year 2021 earnings

Of course, the supermarket giant released its results for financial year 2021 shortly after.

Over the 12 months ended 30 June, Woolworths’ sales grew by 5.7% to reach approximately $67 billion.

It was likely little surprise that its e-commerce sales also boomed, increasing 58% to around $5.6 billion.

The company ended up with a net profit after tax of around $1.9 billion ­– a 22.9% increase on that of financial year 2020.

The next major news to move the Woolworths share price came in December.

API takeover bid

Then, the company jumped in the middle of a long-standing takeover arrangement, outbidding Wesfarmers Ltd (ASX: WES) for Australian Pharmaceutical Industries Ltd (ASX: API) by more than $100 million.

Woolworths offered API shareholders $1.75 per security to acquire the company. That was 12.9% more than Wesfarmers’ $1.55 per share bid.  

However, the supermarket’s bid to acquire the owner of Priceline was looked at with suspicion by some, including the Pharmacy Guild of Australia.

While 2021 ended with the takeover offer hanging in the balance, Woolworths ultimately withdrew its bid last week. Wesfarmers is expecting to acquire API in the current quarter.

The Woolworths share price’s final hurdle

Finally, the retailer ended the year on an unfortunate note.

It released a trading update detailing the impact of COVID-19′s Delta strain – which took hold of much of Australia in the first half of financial year 2022 – on 14 December.

Within the update, Woolworths CEO Brad Banducci commented:

The first half of [financial year 2022] 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.

The news saw the Woolworths share price dip 7.6%, ending the final month 6.8% lower than it started it.

And it hasn’t performed much better since. Year to date, the Woolworths share price has slipped 6.2%, ending Wednesday’s session trading for $36.06.

The post How did the Woolworths (ASX:WOW) share price perform in 2021? appeared first on The Motley Fool Australia.

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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.

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More reading

There were the 5 best performing ASX 200 retail shares of 2021

Woolworths (ASX:WOW) supply woes continue with retailer receiving half of normal deliveries

ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound

If supermarkets are ‘COVID winners’, why is the Woolworths (ASX:WOW) share price sliding into 2022?

API (ASX:API) share price crashes 12% after Woolworths withdraws takeover offer

Motley Fool contributor Brooke Cooper 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 owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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