Woolworths is facing $100m class action claim. Credit: Bidgee – Own work.

Australia-based supermarket Woolworths is facing a $100m lawsuit in the Federal Court.

According to the lawsuit lodged by Maurice Blackburn Lawyers, the supermarket chain breached continuous disclosure obligations and misled investors by issuing and reaffirming false profit guidance in 2015.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

International Litigation Funding Partners (ILFP) is funding the lawsuit.

Maurice Blackburn’s class actions principal Andrew Watson said: “Cases such as this reinforce the need to increase and enhance transparency and proper disclosures from large listed companies, and to ensure they are held to account if they fail to provide the market with accurate information.”

“Cases such as this reinforce the need to increase and enhance transparency and proper disclosures from large listed companies.”

On 27 February 2015, the retailer announced that its guidance for net profit after tax (NPAT) growth of between 4% and 7% for the fiscal year (FY) ending 2015 would not be met.

Following the announcement, Woolworths’ investors suffered losses as its share price witnessed an overall decline of almost 14% from 27 February to 2 March 2015.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

On 6 May 2015, the retailer admitted that it had been using flawed metrics in relation to price competitiveness and stock availability in the second half of 2014 and until January 2015.

After this revelation, the price of Woolworths’ shares witnessed a further overall decline of 7% between 6 May and 7 May 2015.

Lead plaintiff Norman Wills said: “It turns out that what I thought was one of the most reliable companies on the ASX with good businesses at its core, looks like it has failed to inform the market of what was going on within the company.

“I’m really disappointed in the way the company behaved and Woolworths needs to be held to account.”