Losses At Master Set To Exceed $200M As The Company Expands Appliance Offering
In recent month the hardware chain has expanded their house brand appliance offering in an effort to compete with appliance retailers who are facing new competition from Dick Smith and JB Hi Fi.
Analysts estimate that the home improvement business lost around $50 million in the June quarter, compared with losses of $41.4 million in the previous corresponding period and a record $65.8 million in the three months through March.
Deutsche Bank analyst Michael Simotas told Fairfax Media that he estimates that the joint venture lost $210 million in 2015, compared with losses of $169 million in 2014. This would take the red ink spilled over the last three years to more than $500 million.
The new estimates are based on figures released overnight by Woolworths’ US joint venture partner Lowe’s
Lowe’s lost $US14 million ($18 million) its 33 per cent share of the joint venture in the three months through July.
“This is less than the $22 million lost in the third quarter but represents a 22 per cent deterioration relative to the same time last year,” said Mr Simotas.
After adjusting for currency movements and timing differences, Deutsche Bank estimates that Woolworths’ share of the losses was $50.6 million.
Mr Simotas said the continued deterioration was disappointing, especially in light of strong sales and profit growth at Wesfarmers’ Bunnings.