Why is the Coles share price crashing 8% on Friday?

The Coles Group Ltd (ASX: COL) share price is taking a beating today.

Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed yesterday trading for $22.19. In morning trade on Friday, shares are changing hands for $20.50, down 7.6%.

For some context, the ASX 200 is just about flat at this same time.

This follows the release of Coles’ half-year results, covering the 27 weeks to 4 January (H1 FY 2026).

Here’s what we know.

Coles share price tumbles on profit decline

The Coles share price is under heavy pressure today despite the supermarket reporting broadly strong growth figures.

That includes a 2.5% year-on-year increase in sales revenue to $23.6 billion.

Supermarkets sales revenue of $21.37 billion was up 3.6%, although revenue from the company’s liquor division slipped 3.2% to $1.94 billion.

Online shopping showed further growth, with supermarkets eCommerce sales up 27% year on year amid increasing digital engagement.

And earnings before interest, taxes, depreciation and amortisation (EBITDA) – excluding significant items – of $2.21 billion was up 7.8% from H1 FY 2025.

On the bottom line, the supermarket reported net profit after tax (NPAT) – excluding significant items – of $676 million, up 12.5%.

But the Coles share price could be under pressure today with NPAT, including significant items, of $511 million, down 11.3% year on year.

The significant items for the six months come to $235 million, or $165 million after tax. These were recorded as a result of the September Federal Court judgment relating to Fair Work proceedings involving historical underpayment of employees.

On the passive income, management declared a fully-franked interim dividend of 41 cents per share, up 10.8% from last year’s interim payout.

If you’d like to bank the interim Coles dividend, you’ll need to own shares at market close on 9 March. Coles stock trades ex-dividend on 10 March. You can then expect to receive that passive income payout – representing a 2% return at current levels – on 30 March.

What did management say?

Commenting on the half-year results, Coles 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.”

As for the second half of FY 2026, Weckert said:

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.

As at 4 January, Coles held cash and cash equivalents of $598 million.

With today’s intraday losses factored in, the Coles share price remains up 1.6% over 12 months, not including dividends.

The post Why is the Coles share price crashing 8% on Friday? appeared first on The Motley Fool Australia.

More reading

• Coles Group shares: Profit jumps, Supermarkets excel
• 5 things to watch on the ASX 200 on Friday
• 35 ASX All Ords shares with ex-dividend dates next week
• Here’s the share price I would buy Coles stock at
• Why it’s a great time to buy these ASX 200 shares in these rocky times

Motley Fool contributor Bernd Struben 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.