Fund Manager Summary on Woolworths Group Ltd (ASX:WOW)
In February 2026, Ausbil Investment Management commented that despite Woolworths Group Ltd (ASX:WOW) having a high-quality management team and being a leading Australian retailer, current earnings risks mean the stock merits a hold. Overall, fund managers converge on a cautious, conditional view of Woolworths: they recognise structural advantages — a superior national store network, a growing ecommerce moat and stabilising New Zealand and B2B segments — but weigh these against tangible operational and market pressures, including distribution-centre disruptions and strikes, wage inflation, aggressive price investment to defend market share, tobacco volume declines and Big W underperformance that have driven margin compression and some share loss to Coles; managers emphasise actionable considerations such as the $400m above-store cost-out program, automated distribution investment, portfolio simplification (sale of MyDeal, Healthylife integration) and targeted pricing and Everyday Rewards initiatives as the primary levers to restore items/transactions and margins, while noting that guidance resets and consensus downgrades have prompted some to reduce exposure or remain on the sidelines until there is clearer, sustained evidence of volume recovery and margin stabilisation.
Commentary From The Managers
There are 16 insights from 11 fund managers regarding their investment in Woolworths Group Ltd (ASX:WOW) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Alphinity Investment Management
16 Mar 2026
$36.05
Summary
- Alphinity Investment Management increased their position in Woolworths Group Ltd because research indicated Coles had priced in its gains while Woolworths is entering a new growth phase.
- After 18 months favouring Coles, the team tactically rotated into Woolworths as fresh leadership signals a strategic renewal.
- The switch was validated shortly after, with Woolworths rising and Coles declining following the portfolio change.
- Alphinity sees Woolworths as having more growth runway at the current juncture relative to its supermarket peer.
PM Capital
28 Feb 2026
$36.68
Summary
- PM Capital believes Woolworths' businesses remain fundamentally attractive, but reduced their position because valuations have increased significantly over the past year and no longer justify such large weightings.
- High-quality consumer franchise: leading supermarket and retail brands with resilient cash flows, strong market share and pricing power.
- Predictable earnings and cash generation: stable demand for staples supports reliable free cash flow and dividend capacity.
- Operational upside: scope for margin improvement through cost efficiencies, private-label growth and supply-chain optimisation.
- Valuation sensitivity: re-rating has compressed expected future returns, reducing the margin of safety versus earlier entry points.
- Risk-managed approach: trimming positions lowers concentration risk and preserves capital for higher expected-return opportunities elsewhere.
- Principal risks: intensifying competition, inflationary cost pressures, execution risk on strategic initiatives and potential regulatory or consumer shifts that could impair margins.
- Portfolio stance: retain exposure at a smaller size—recognise company quality while reallocating capital to better risk-reward ideas.
Wilson Asset Management
28 Feb 2026
$36.68
Summary
- Wilson Asset Management believes Woolworths Group is a core defensive holding with improving momentum and continues to hold, underpinned by its scale, supply chain advantages, and data capabilities.
- Woolworths delivered a high-quality interim result, with strong sales growth carrying through into the early weeks of calendar year 2026.
- Early 2H trading data suggests Woolworths may have regained its sales leadership, building on recovery signals first evident in October 2025.
- Revenue strength was achieved without compromising margins, supported by disciplined cost management, leading to upward revisions in consensus earnings.
- The 'Woolworths Living' division also performed well, driven by PetStock and a recovery in trading at Big W.
Ausbil Investment Management
26 Feb 2026
$36.35
Summary
- Ausbil Investment Management believes Woolworths remains a high‑quality, market‑leading retailer and continues to hold because despite the recent pullback, near‑term earnings risks suggest patience is warranted before increasing exposure.
- High‑quality management: management is viewed as experienced and capable, contributing to Ausbil’s confidence in the franchise.
- Market leadership: a leading retail footprint, strong brand presence and scale advantages underpin durable competitive positioning.
- Defensive earnings profile: the business generates resilient cash flow and exhibits characteristics of a defensive consumer staple, supporting capital allocation flexibility.
- Near‑term earnings risks: pressures such as margin headwinds, competitive intensity and consumer spending variability create uncertainty for near‑term earnings.
- Valuation consideration: although the share price has pulled back, current levels do not sufficiently compensate for the identified earnings risks, so the position is held rather than increased.
- Key watchpoints: monitor earnings delivery, margin recovery, cost control initiatives and execution against strategic initiatives before reassessing conviction.
Maple-Brown Abbott
31 Dec 2025
$29.38
Summary
- Maple-Brown Abbott believes Woolworths' current challenges are largely priced in and continues to hold because stabilising market share, cost efficiencies, recovery or disposal of underperforming businesses and an attractive valuation should support a return to earnings growth.
- Business mix: Operates the leading Australian supermarket chain plus Big W, New Zealand supermarkets and food services, and an online marketplace.
- Recent underperformance: Material underperformance over the last two years driven by share loss and margin contraction in Australian and NZ supermarkets and losses in Big W and the online marketplace.
- Near-term risk: Australian supermarkets still face earnings pressure, but there are early signs that share loss is stabilising.
- Operational response: An active efficiency program and focus on restoring supermarket margins should underpin a return to growth once share stabilisation persists.
- Non-core remediation: Group earnings should benefit from recovery, sale or closure of underperforming non-core businesses (Big W, marketplace and other assets).
- Valuation edge: Stock trades at a modest premium to the market PE and a similar multiple to Coles despite normally trading at a material premium and offering a better earnings growth outlook.
Perennial Partners
30 Nov 2025
$29.26
Summary
- Woolworths (+3.2%) outperformed over the month, benefiting from a risk-off environment favoring Consumer Staples stocks.
- Perennial Partners continues to hold Woolworths as it represents a high-quality stock that has seen recent sell-offs.
- Operational issues at Woolworths are acknowledged, but are expected to be addressed over time.
- Market share lost to Coles and other competitors is likely to be regained as operational improvements take effect.
- Woolworths has a competitive advantage due to its scale, which enhances purchasing power and allows for fixed cost fractionalization.
- Although recovery in operational momentum will take time, improved business execution is anticipated to lead to a significant re-rating of the stock.
Pendal Group
3 Nov 2025
$28.22
Summary
- Pendal Group notes that Woolworths (WOW, +6.3%) delivered a 1Q26 trading update that was broadly in-line with expectations.
- Australian Food sales growth was reported at +2.1% for the first eight weeks, improving to +3.2% in October.
- Ex-tobacco sales growth moderated from +4.0% in the first eight weeks to +3.8% for the full quarter, with tobacco sales declining 51%.
- Management indicated that fruit and vegetable deflation posed a headwind in the latter part of the quarter.
- There were encouraging signs in transactional momentum improving into 2Q26, particularly in items and transactions.
- NZ Supermarkets showed stronger performance with +3.7% LFL sales growth.
- Woolworths adjusted its promotional strategy in mid-September, enhancing Everyday Rewards visibility and personalized offers.
- Big W's performance improved due to a better full-price clothing mix and favorable summer weather conditions.
- Management remains comfortable with FY26 earnings guidance, despite year-to-date performance being below acceptable levels.
- While the update was not spectacular, it indicates progress given recent challenges, particularly with October's acceleration to +5% ex-tobacco.
- The critical test for Woolworths will be the November/December period, as it will be compared to last year's Victorian supply chain disruptions.
Perennial Partners
31 Oct 2025
$28.41
Summary
- Woolworths has shown a rally of 6.4% after a Q3 update, indicating tentative signs of improvement.
- Perennial Partners has recently moved to an overweight position in Woolworths.
- The fund manager finds Woolworths to be more attractive compared to Coles, based on relative valuations.
- There is a directional change in operating performance that supports this investment thesis.
Tamim Funds Management
29 Oct 2025
$27.61
Summary
- Woolworths is a key player in the Australian economy, affected by consumer spending trends.
- After a challenging FY25, Woolworths is showing signs of stabilisation in Q1 FY26.
- Sales increased by 2.7% year on year to $18.5 billion in Q1 FY26.
- Australian Food, the core of Woolworths, showed a 3.8% sales growth excluding tobacco.
- Woolworths is focusing on price, simplicity, and execution to rebuild customer trust.
- Digital engagement is a competitive advantage, with eCommerce sales growing 13.2%.
- New Zealand operations are stabilising, contributing to earnings diversification.
- BIG W is beginning a turnaround, with modest sales growth and improved efficiency.
- The Australian B2B segment is performing solidly, providing stability and diversification.
- Management is focused on executing a strategy rather than seeking high growth.
- Woolworths is preparing for the critical Christmas trading period, with early sales indications up 5%.
- The market currently values Woolworths as a defensive blue-chip, with potential for growth if management executes well.
- Tamim Funds Management continues to hold Woolworths, anticipating a disciplined growth trajectory.
Clime Investment Management
30 Sept 2025
$26.70
Summary
- Woolworths (WOW) detracted in September due to ongoing negative sentiment weighing on the share price.
- Management execution has fallen short of expectations, but recent steps to reinvest in core supermarket operations are encouraging.
- Rebuilding trust and market share will take time.
- Clime Investment Management continues to view WOW as a high-quality, defensive business.
- Woolworths is underpinned by a strong store network, supply chain, and superior online offering.
- This presents an attractive long-term opportunity as earnings stabilise and its valuation potentially reverts to its historical mean.
First Sentier Investors
30 Sept 2025
$26.70
Summary
- First Sentier Investors notes a disappointing year for Woolworths Group due to operational interruptions and poor execution.
- New management is resetting the leadership team and strategic direction.
- There is a need for investment in more competitive pricing to regain lost customers.
- This investment could result in a more competitive market environment with potentially lower margins.
- Current market expectations do not seem to fully account for these changes.
- As a result of these factors, First Sentier Investors has exited their position in Woolworths.
- The recent exit from MyDeal was optimistic; however, the New Zealand food and Big W businesses remain underperforming.
- These segments continue to deliver below-par returns on investment.
Alliance Bernstein
30 Sept 2025
$26.70
Summary
- Woolworths Group Ltd reported FY2025 results that were below expectations.
- The share price faced additional pressure from a weak trading update.
- Market share losses to Coles were highlighted in the update.
- FY2026 guidance was lowered due to higher-than-expected costs.
- Alliance Bernstein continues to hold because of the long-term potential despite recent challenges.
Pendal Group
31 Aug 2025
$28.75
Summary
- Pendal Group provides an update on their investment thesis regarding Woolworths Group Ltd.
- Woolworths disappointed expectations of a sharp rebound in earnings following a challenging FY25.
- Profits fell 17% in FY25, attributed to distribution centre strikes leading to a loss of market share.
- Revenue growth is currently at low single digits in Q4 FY25 and the first eight weeks of FY26.
- This growth is lagging behind Coles, despite promotional efforts from Woolworths.
- Guidance for earnings growth is set at mid-to-high single digits, compared to the market's mid-teens expectations.
- This has resulted in consensus downgrades for FY26 and FY27.
Alliance Bernstein
30 June 2025
$31.11
Summary
- Woolworths, a major Australian supermarket and retail operator, was a detractor in the quarter.
- The wider consumer-staples sector weakened, impacting sentiment.
- Woolworths’ decision to lower prices across a range of products raised investor concerns.
- Concerns focus on the durability of industry pricing and margin stability.
- Alliance Bernstein continues to like Woolworths for its stable cash-flow profile.
- They believe the market is overstating the longer-term impact of recent price moves.
Clime Investment Management
31 Mar 2025
$29.55
Summary
- Clime Investment Management initiated a position in Woolworths Group Ltd (WOW) following a period of weak performance.
- The fund manager believes current headwinds in WOW's food and non-food divisions are transitory.
- Clime sees WOW's superior physical store network as a competitive advantage.
- The growing online business positions WOW well for future growth in earnings and dividends.
Cooper Investors
30 June 2024
$33.57
Summary
- Cooper Investors added to their Woolworths (WOW) position during the quarter.
- The supermarket operators and the federal government accepted the 11 recommendations from the Food and Grocery Code of Conduct.
- This acceptance followed the conclusion of the Supermarket Senate Inquiry.
- There is a regulatory risk overhang due to the ongoing ACCC review.
- Despite this, Woolworths is positioned as a consumer staple amid ongoing cost of living pressures.
- Woolworths is trading at a multi-year valuation low on a risk-adjusted basis, which is viewed as favourable.
Clime Investment Management
30 June 2024
$33.57
Summary
- WOW is recognized as Australia's premium supermarket operator.
- It boasts a market-leading online grocery business.
- Strong ancillary business units contribute to supporting margins.
- Population growth trends are creating tailwinds towards increased home eating.
- Clime Investment Management sold their investment in COL to leverage recent share price strength.
- This decision allows for an increase in portfolio weight in WOW, which presents a larger share price upside.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Woolworths Group Ltd (ASX:WOW)?
Fund managers including Cooper Investors, Clime Investment Management, Alliance Bernstein, Pendal Group, Tamim Funds Management, Perennial Partners, First Sentier Investors, Maple-Brown Abbott, Ausbil Investment Management, PM Capital and Wilson Asset Management have invested in Woolworths Group Ltd (ASX:WOW).
Why do fund managers invest in Woolworths Group Ltd?
Fund managers invest in Woolworths Group Ltd due to its strong market position and stable cash flow. Despite recent operational challenges, the company has a competitive store network and a growing online presence, positioning it for potential earnings recovery and dividend growth. Fund managers value Woolworths for its resilient business model, which generates consistent revenue, even in a volatile consumer landscape. Additionally, its commitment to price competitiveness and operational improvements suggests it could regain market share and enhance profitability over time.
What happened to Woolworths Group Ltd (ASX:WOW)?
Fund managers are investing in Woolworths Group Ltd due to its strategic focus on stabilizing core operations, enhancing customer engagement through better pricing and value perception, and leveraging its digital infrastructure to drive eCommerce growth. Despite challenges in previous fiscal years, recent performance indicators, including sales growth and improved customer sentiment, suggest a potential turnaround. Managers anticipate long-term value creation as Woolworths simplifies its operations and strengthens its competitive position, making it a resilient investment for a slower growth environment.
What is the short interest in Woolworths Group Ltd (ASX:WOW)?
The short interest in Woolworths Group Ltd (ASX:WOW) is 1.46% which makes it the 172nd most shorted stock on the ASX. Of the 1.2B shares that Woolworths Group Ltd has on issue, 17.8M have been sold short.
What does Woolworths Group Ltd (ASX:WOW) do?
Woolworths Group Ltd. engages in the operation of general merchandise consumer stores and supermarkets in Australia, New Zealand and India. It operates through the following segments: Australian Food, Australian B2B, New Zealand Food, Big W, and Other. The Australian Food segment is involved in procurement of food and related products for resale and provision of services to retail customers. The Australian B2B segment pertains to the procurement and distribution of food and related products for resale to other businesses and provision of supply chain services. The New Zealand Food segment refers to the procurement of food and drinks for resale and provision of services to retail and wholesale customers. The BIG W segment is focused on the procurement of discount general merchandise products for resale to retail customers. The Other segment is comprised of Quantium and MyDeal. The company was founded by Percy Christmas, Stanley Edward Chatterton, Cecil Scott Waine, George William Percival Creed, and Ernest Robert Williams on December 5, 1924, and is headquartered in Sydney, Australia.