Why is the Woolworths (ASX:WOW) share price underperforming Coles today?

What’s with Woolies shares today?

| More on:
supermarket asx shares represented by shopping trolley in supermarket aisle

Image source: Getty Images

The Woolworths Group Ltd (ASX: WOW) share price is not having a great day of it so far this Tuesday. Woolworths shares are currently down by 0.1% to $39.18. That’s a little worse than what the broader S&P/ASX 200 Index (ASX: XJO) is doing today. It’s currently up by a decent 0.27% to 7,268 points.

But it’s a lot worse than its own arch-rival Coles Group Ltd (ASX: COL). Coles shares, in contrast to Woolworths (and the ASX 200), are currently in the green today, up 0.44% to $17.02 a share.

So why are Woolworths shares down today when Coles shares are on the up? We actually saw a similar trend play out yesterday, with Coles shares also rising in the face of a falling Woolworths share price and the ASX 200 in the red.

So what’s going on?

Bricks and plastic weghing on Woolworths share price?

Well, there have been a couple of recent developments that have arguably not done Woolies any favours. Firstly, as my Fool colleague Brooke covered last week, Woolworths’ latest collectables program has run into some problems.

Woolworths Bricks, a collectable set of building blocks that “customers can use to build a miniature version of a sustainable Woolworths supermarket”, are reportedly in short supply. Shortages have resulted in many supermarkets running out of Bricks completely.

Woolworths has stated that “it has plenty of Woolworths Bricks left” and “will continue to restock stores that have run out of the collectables”. However, this may still be a factor in today’s share price performance.

Another issue that might be in play today is news of a capital raising. Not by Woolworths itself, but from one of its subsidiaries. According to a report in the Australia Financial Review (AFR) today, the private company Samsara is “eyeing a capital raising of up to $30 million”.

Samsara is a plastics recycling company that Woolworths owns a 25% stake in through its Woolworths 360 arm. Woolworths 360 was reportedly set up to “help accelerate sustainability practises across the group”.

Samsara also boasts the CSIRO’s venture capital arm Main Sequence as a shareholder, as well as the Australian National University (ANU).

Its technology enables plastics to be broken down and reused almost endlessly. Samsara’s founder and CEO Paul Riley calls it “infinite recycling”.

However, Woolworths 360 told the AFR that “we haven’t made a call on that yet” when asked if Woolworths would be participating in the capital raise. This could also be a factor in today’s Woolworths share price performance.

At the current Woolworth share price of $39.18, the company has a market capitalisation of $49.64 billion, a price-to-earnings (P/E) ratio of 32.1 and a dividend yield of 2.76%.

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 on Consumer Staples & Discretionary Shares

A trader stand looking at a sharemarket graph emblazoned with the words buy and sell
Consumer Staples & Discretionary Shares

Could the Wesfarmers share price have already bottomed?

Could Wesfarmers shares be in the buy zone today?

Read more »

Woman thinking in a supermarket.
Consumer Staples & Discretionary Shares

Why I think Coles is a better ASX dividend share than Woolworths

Are Coles shares a better pick for dividends than Woolworths?

Read more »

A woman in her 20s holds a glass of milk up towards her face as if to drink it but makes a grimacing face as though she has smelt that the milk might be off or soured.
Consumer Staples & Discretionary Shares

A2 Milk share price wavers amid class action news

Certain shareholders may be eligible to join the class action.

Read more »

Consumer Staples & Discretionary Shares

Here’s why the Eagers share price is sliding today

Investors don't appear to be satisfied from the company's announcement.

Read more »

Two men in a bar looking uncertain as they hold a betting slip and watch TV.
Mergers & Acquisitions

Here’s why the Tabcorp share price is lifting on Wednesday

The gambling entertainment company has started the day in the green.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Consumer Staples & Discretionary Shares

Why did the Bubs share price jump 16% today?

Bubs shares were on fire on Tuesday...

Read more »

Three guys in shirts and ties give the thumbs down.
Consumer Staples & Discretionary Shares

Why is the A2 Milk share price falling today?

A2 Milk shares are falling on Tuesday...

Read more »

Man looks upset as he holds an empty wallet.
Consumer Staples & Discretionary Shares

Why are the dividends from Woolworths shares still so small?

Rivals Coles and Metcash offer much more impressive dividend yields. How come?

Read more »