Supermarket giant lifts annual profit, but not by much
Derek Rose |
Australia’s second-biggest supermarket chain has reported a slight rise in annual profit and says the result was pleasing given a challenging economic environment that pushed up prices.
Coles said it has entered the new financial year in a strong position, with its flagship supermarkets division gaining market share and sales in the first eight weeks of 2026/27 “consistent” with the final quarter of 2025/26.
“We know what matters to our customers – delivering great value, quality and convenience every time they shop with us,” chief executive Leah Weckert said on Tuesday.
Coles made a bottom-line net profit of $1.1 billion in 2025/26, up one per cent on the previous year.
Net profit – excluding a significant item of $235 million, related to a court judgment in a Fair Work case – came to $1.3 billion, a rise of 13.7 per cent.
Sales jumped by nearly three per cent to $45.6 billion, with its supermarkets division leading the way at $41.5 billion, a gain of 3.7 per cent.
Liquor sales fell 3.3 per cent to $3.5 billion.
“Financial year 2026 was another year of consistently strong performance for Coles, with above-market sales and strong earnings growth,” Ms Weckert said.
“This performance is particularly pleasing, given the challenging operating environment, including continued cost of living pressures, geopolitical uncertainty and greater regulatory complexity.”
Coles’ underlying earnings – before interest, tax, depreciation and amortisation – rose seven per cent to $4.2 billion.
The result comes ahead of rival Woolworths’ full-year results on Wednesday.
Shares in Woolworths have been outperforming Coles, rising 18.9 per cent over the past 12 months compared to a 9.9 per cent rise for its rival.
In comparison, the stock exchange’s benchmark S&P/ASX200 index has gained just 1.5 per cent in the past 12 months.
“Investors have gone back to basics by buying up the supermarkets,” said eToro lead analyst Josh Gilbert.
“This week, we’ll find out how good a deal they got.”
Coles’ results also came on the day Aldi won Australia’s most satisfied customer award for supermarkets from market researcher Canstar.
Canstar’s analysis found that while produce freshness, customer service, and value for money are important to shoppers, the single strongest driver of satisfaction is the feeling of finding extra savings through deals or specials, rather than from the underlying price itself.
It’s the ninth consecutive win for Aldi, based on the feedback of 2,738 shoppers.
Coles declared a final dividend of 37 cents, taking the total payout for the year to 78 cents, up from 69 cents in 2024/25.
AAP