Coles has announced a 3.6% increase in group sales, reaching $44.3 billion, with an EBITDA rise of 11% to $3.9 billion for the current fiscal year. The group’s net profit after tax also increased, up by 2.4%, yielding a total of $1.07 billion.
The company attributes much of its sales growth to its supermarket division, which showed a robust performance, growing by 4.3% and reaching $40 billion. The supermarket division’s EBITDA also rose by 9%, jumping from $2 billion to $2.1 billion. In addition, the division saw a rise in gross margin, from 26.6% to 27.4% on a year-on-year basis.
This increase in supermarket sales revenue was bolstered by strong volume growth across transactions and basket sizes. Customers reacted positively to the company’s seasonal ‘Great Value, Hands Down’ value campaigns. Notably, the company had strong performance across several special occasions, such as Christmas, Easter, Halloween, and Mother’s Day. The success of collectible and continuity programs, such as the Curtis Stone Glassware and Harry Potter Magical Discs campaigns, played a significant role in bolstering Coles’ supermarket results for this financial year.
Coles’ e-commerce sector within the supermarket division witnessed a rise of 24.4%, reaching $4.5 billion. The increase in penetration to 11.2% was driven by digital campaigns, Black Friday, Coles Fest, and the May Mega Sale.
However, the group’s liquor division reported a slight increase of 1.1% in sales revenue, amounting to $3.6 billion, with a flat gross margin at 23.5%. The division’s EBITDA saw a decrease of 8.6%, falling from $133 million to $113 million on a year-on-year basis. Despite the decrease, Coles saw positive results in the liquor sales due to new store openings, a Tasmanian acquisition, and the curating of its wine category to meet local customer preferences.
Coles’ simplified ‘Simply Liquorland’ banner pilot was well-received in selected stores across South Australia, Victoria, and Queensland. The company plans to complete the ‘Simply Liquorland’ by the third quarter of the next fiscal year at a one-time cost of approximately $20 million. In addition, they plan to open about 19 new liquor stores, close 25 stores, and renew roughly 130 stores.
Looking forward, Coles’ Chief Executive Officer, Leah Weckert, emphasized that the primary focus for the company will be on cost control and the delivery of the first full year of annualised benefits from its ADC program.
What drove the growth in Coles’ sales?
The growth in Coles’ sales was largely driven by a strong performance in its supermarket division and positive customer response to its seasonal value campaigns.
How did Coles’ e-commerce sector perform?
Coles’ e-commerce sector within the supermarket division showed a significant rise of 24.4%, reaching $4.5 billion.
What are the future plans for Coles’ ‘Simply Liquorland’?
The ‘Simply Liquorland’ is planned to be completed by the third quarter of the next fiscal year, with approximately 19 new liquor stores being opened, 25 stores getting closed, and about 130 stores being renewed.
