Woolworths Limited
(ASX:WOW) is reportedly under threat of an earnings downgrade according to a report from Merrill Lynch.
Media reports suggest the wealth management company has cited Woolies as the most vulnerable among food retailers suggesting it relies on price cuts from suppliers to prop up its earnings.
Merill Lynch also believes rising costs were another factor for its findings. The retail giant has rejected the claims and says its recent investments and divestments will enable further growth and productivity.
Woolworths forecasts net profit growth of 3-6 per cent this financial year, and plans to open 35 new supermarkets.
Woolworths delivered a full year net profit of $1.8 billion in the 2012 financial year.
