Key Highlights

  • Coles expects first-half Supermarkets EBIT, excluding significant items, to be in line with the prior corresponding period.
  • Group sales were $11,209 million in the first quarter of FY27, up 2.2 per cent.
  • Supermarkets eCommerce sales grew 22.9 per cent to $1,623 million.
  • Management flagged higher fuel costs and said growth moderated into the second quarter.

Coles Group (ASX:COL), a constituent of the S&P/ASX 50, told investors on 30 October 2026 that first-half Supermarkets Earnings before interest and tax, excluding significant items, should be in line with the prior corresponding period.

What Coles does

Coles is one of Australia's two dominant supermarket operators. Its Supermarkets division includes Coles-branded stores, the Exclusive to Coles private-label range, online shopping and the Flybuys loyalty programme. A separate Liquor division operates retail brands and a store network the company is repositioning. As a large, widely held company, it sits within the S&P/ASX 50 index.

Latest developments

On 30 October 2026 Coles reported first-quarter FY27 sales for the 13 weeks to 27 September 2026. Group sales were $11,209 million, up 2.2 per cent. Supermarkets sales rose 3.6 per cent to $10,320 million, while comparable supermarket sales growth was 2.7 per cent, down from 4.6 per cent in the first quarter of FY26.

Supermarkets eCommerce sales grew 22.9 per cent to $1,623 million, lifting online penetration to 15.7 per cent from 13.3 per cent. Liquor sales fell 1.3 per cent to $831 million, in line with comparable sales.

Management said supermarket sales remained resilient into the second quarter but growth had moderated. It also flagged higher fuel costs in the first half, and noted that its Viva Energy Supply agreement expires in November 2026.

Financial and operational evidence

The quarter followed full-year FY26 results released on 25 August 2026. Group sales Revenue was $45,580 million, up 2.8 per cent. EBIT excluding significant items was $2,322 million, up 9.9 per cent, and net profit after tax excluding significant items was $1,255 million, up 13.7 per cent.

Supermarkets sales revenue rose 3.7 per cent and EBIT rose 12.2 per cent, with the EBIT Margin up 43 basis points. Supermarkets eCommerce sales rose 26.4 per cent to $5.6 billion for the year, and Exclusive to Coles sales rose 6.1 per cent. Liquor sales revenue fell 3.3 per cent, and a multi-year repositioning programme was launched.

Coles declared a final Dividend of 37 cents per share, fully franked, taking the FY26 total to 78 cents per share, fully franked. Future dividends are a board decision and should not be assumed.

Full-year Supermarkets EBIT grew strongly, whereas first-half guidance implies no growth, a notable change in direction.

Material risks

Competition remains intense, with the other major supermarket group and discounters pursuing shoppers who are sensitive to prices. Promotional activity could pressure margins if Coles has to match it. Slowing comparable sales add to that concern.

Costs are another issue. Management expects higher fuel costs, and the Viva Energy agreement expiry creates some transition uncertainty. Coles is also increasing Investment in new stores, renewals, technology and supply chain automation, including a new automated distribution centre in Victoria, so execution and timing matter.

Liquor continues to shrink, and the repositioning programme may take time to deliver.

Milestones to watch

Investors will watch for the expiry of the Viva Energy supply agreement in November 2026 and any update on replacement arrangements. The annual general meeting, typically held in the closing months of the calendar year, may bring further commentary on trading.

The half-year result, expected in early 2027, will test the guidance that Supermarkets EBIT will match the prior period. Key measures include comparable sales, eCommerce penetration, Liquor trends, gross margin and the cost of the investment programme.