The result was excellent. Same store sales faced difficult comps in food, offset somewhat by Big W…
Margins over the year remain robust, with Big W moving steadily towards profitability, after a few difficult years.
The outlook statement for FY22 notes the resurgent COVID impacts, but the market continues to support WOW given that the defensive, cash generative earnings profile of consumer staples greatly outweighs the discretionary component.
The problem is best shown below, a simple model that calculates an implied P/B from forecast ROE’s, and forecast earnings per share growth (in logs).
WOW is expensive, no doubt about it, in our mind.
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