Coles Group 1H supermarkets comp sales +3.4%
TL;DR
Coles Group reported a 3.4% increase in comparable sales for its Supermarkets segment in the first half of fiscal 2025, outpacing rival Woolworths. Net profit declined slightly due to higher financing costs, but underlying earnings surged 14%, driven by strong holiday demand and operational adjustments.
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Coles Group 1H supermarkets comp sales +3.4%
Coles Group Reports 3.4% Supermarket Comparable Sales Growth in First Half
Australian supermarket chain Coles Group Ltd (COL.AX) reported a 3.4% increase in comparable sales for its Supermarkets segment during the first half of the 2025 fiscal year, outpacing growth at its rival Woolworths. The performance reflects strong holiday-season demand and strategic operational adjustments, though net profit declined slightly due to rising financing costs.
For the six months ended December 31, Coles recorded net profit after tax from continuing operations of A$576 million, a 3% decrease from A$594 million in the prior year. The decline was attributed to higher lease-related financing expenses, which offset robust sales growth. However, underlying earnings for the Supermarkets segment—a key revenue driver—surged 14% to A$2.03 billion, driven by discounted offerings amid high consumer living costs.
The results were bolstered by a warehouse strike at Woolworths, which disrupted supply chains and left shelves understocked in key regions. Coles capitalized by enhancing its own supply chain operations and hiring additional staff in Victoria and New South Wales, generating A$120 million in incremental sales. Analysts noted that Coles maintained its competitive edge, with third-quarter sales growth in the Supermarkets segment reaching 3.4% year-to-date, compared to 3.3% at Woolworths.
Coles declared an interim dividend of 37 Australian cents per share, a five-year high and up from 36 cents in the prior year. The company also announced leadership changes, including the retirement of Chairman James Graham on April 30, with Peter Allen set to succeed him.
While profit fell short of the previous year's record, Coles' sales outperformance and margin resilience highlight its ability to navigate a challenging retail landscape. The results align with market expectations, as the Visible Alpha consensus forecast had predicted A$574.1 million in net profit.
(https://www.reuters.com/business/retail-consumer/australias-coles-first-half-profit-slips-3-2025-02-26/): Reuters, Feb 27, 2025
(https://finance.yahoo.com/news/australias-coles-first-half-profit-213851646.html): Yahoo Finance, Feb 27, 2025
