Coles Group has posted a solid set of numbers for the first half of FY25, with strong supermarket performance driving overall growth despite broader economic pressures. The company reported group sales of $23.04 billion, up 3.7%, while underlying EBIT rose 8.9% to $1.21 billion. However, net profit after tax (NPAT) was slightly down at $576 million (-2.2%), impacted by significant items related to future supply chain investments.
The board has declared a fully franked interim dividend of 37 cents per share, up 2.8%, reflecting confidence in the company’s resilience and future strategy.
Supermarkets Shine Despite Industry Disruptions
Coles’ supermarkets division was the standout performer, with sales increasing 4.3% to $20.63 billion. This growth was fueled by a focus on affordability, strong trading during key events, and a 22.6% surge in eCommerce sales. Notably, the company swiftly navigated supply chain disruptions, generating an additional $120 million in supermarket sales and $20 million in EBIT.
CEO Leah Weckert emphasized Coles’ commitment to value, fresh quality, and availability, stating that customer experience metrics improved despite cost-of-living pressures. She also credited automation and technology investments for enabling the company to manage peak demand more effectively.
Liquor Growth Slows, But eCommerce Remains Strong
Liquor sales edged up 0.8% to $2 billion, with a 9.2% increase in online sales. However, underlying EBIT for the segment fell 20.2% to $67 million, reflecting competitive pressures and a changing consumer landscape. Coles is responding by refining its liquor strategy, including banner simplifications and new product launches.
Major Supply Chain Investments Underway
Coles continues to push forward with its supply chain modernization, announcing a $880 million investment in a third Automated Distribution Centre (ADC) in Victoria. This facility will enhance the company’s capacity to process 4.6 million cartons per week, supporting long-term efficiencies.
Existing ADCs in New South Wales and Queensland successfully handled peak holiday demand, highlighting the benefits of automation. Additionally, Customer Fulfilment Centres (CFCs) in Melbourne and Sydney have now fully transitioned, improving order accuracy and customer satisfaction.
Cost Savings and Sustainability Efforts Pay Off
The “Simplify and Save to Invest” initiative delivered $157 million in savings, helping Coles offset inflationary pressures while reinvesting in customer offerings. The company also made strides in sustainability, ranking #1 in corporate giving in Australia and committing to no deforestation targets under the Science-Based Targets initiative (SBTi).
Looking Ahead
Despite ongoing economic headwinds, Coles is demonstrating resilience and adaptability, with automation, cost control, and customer focus underpinning its long-term strategy. The company remains well-positioned to navigate challenges while continuing to deliver value for customers and shareholders.
