Coles Group shares: Profit jumps, Supermarkets excel

The Coles Group Ltd (ASX: COL) share price is in focus today after the supermarket giant reported a 2.5% rise in group sales revenue to $23.6 billion and a strong 12.5% lift in net profit (excluding significant items), with continued momentum across its core Supermarkets division.

What did Coles Group report?

• Group sales revenue: $23.6 billion, up 2.5% on the prior period
• Net profit after tax (excluding significant items): $676 million, up 12.5%
• Group EBIT (excluding significant items): $1,231 million, up 10.2%
• Supermarkets adjusted sales revenue (ex. tobacco): up 6.1%
• Supermarkets eCommerce sales growth: 27.0%
• Interim dividend: 41 cents per share, fully franked

What else do investors need to know?

Coles’ Supermarkets business continued its strong trajectory, with adjusted sales revenue up 6.1% excluding tobacco and robust growth online. Customer satisfaction scores improved across all key areas, and investments in automation and operational efficiency are delivering tangible results.

While Liquor segment sales softened by 3.2%, convenience store performance was a positive, and the ‘Simply Liquorland’ rebranding has now been completed. Coles’ Flybuys loyalty program hit 10 million members, increasing engagement and supporting sales.

Significant items of $235 million before tax were recognised following a Federal Court judgement relating to Fair Work proceedings, but the group’s balance sheet remains strong, with a lease-adjusted leverage ratio of 2.6x and ongoing investment in strategic priorities.

What did Coles Group management say?

CEO Leah Weckert said:

We have delivered another strong set of results in a highly competitive operating environment, successfully cycling the competitor industrial action disruption in November and December 2024. The momentum in our business has enabled us to continue offering a compelling value proposition to customers, particularly over the festive season, while also achieving further improvements in availability and customer experience metrics. It is clear that our focus on executing against our strategic priorities and the successful delivery of our major ADC and CFC transformation investments are delivering benefits for both our customers and our shareholders. As we look ahead we are well positioned, with a strong balance sheet and cash flow generation, to continue to invest in areas that will strengthen and expand our core customer proposition and deliver value for shareholders. I would also like to recognise that over the last two months our teams have done an incredible job in managing the impacts of extreme weather events in parts of Australia, ensuring essential items reach local communities in need. I would like to acknowledge their dedication and hard work, in addition to the work of all of our team members, who bring the Coles values to life every day.

What’s next for Coles Group?

Coles’ outlook remains steady for the second half, with Supermarkets sales revenue growing 3.7% in the first seven weeks of the third quarter. The company will focus on maintaining momentum across value offerings, store renewals, and digital upgrades.

Coles’ major investments in distribution centre automation and omnichannel experience continue to support efficiency and customer satisfaction. Management remains committed to delivering consistent value to shoppers while building a resilient, future-ready business for shareholders.

Coles Group share price snapshot

Over the past 12 months, Coles Group shares have risen 9%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.

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The post Coles Group shares: Profit jumps, Supermarkets excel appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.