Coles shares slide as Q1 revenue as liquor sales lower than expected
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More news: Shares in Coles fell in afternoon trade as liquor revenue came in 1.1% lower than expected and comparable sales growth for the segment was 2.8% lower than expected at -1.4%, according to Visible Alpha.
At 12:33pm AEDT, shares in Coles had slipped 2.8% to $22.06, although it was still up 16.9% in the year to date.
RBC Capital Markets analyst Michale Toner said the “supermarkets result is largely in line” but the liquor result “was soft”, which reflects “a combination of ongoing cyclical and structural headwinds in the liquor retail space”.
Toner also flagged that for the company’s outlook “challenges in the liquor market were called out, with consumers remaining budget conscious”. Coles had also flagged that supermarket sales growth in the early part of Q2 was at a similar level to Q1.
Coles posts 3.9% lift in Q1 revenue as liquor, tobacco sales slide
The news: Retail giant Coles has reported a 3.9% rise in group sales for the first quarter, boosted by growth in its core supermarkets business, while tumbling tobacco and liquor sales continued to weigh.
The numbers: Supermarket revenue was up 4.8% year on year to $9.97 billion. Comparable sales lifted 4.6% and eCommerce sales rose 27.9%.
New tobacco legislation and growth in the illicit market led to a 57% decline in tobacco sales compared to the prior corresponding period, with tobacco sales forming less than 2% of total sales. Excluding tobacco, Q1 group sales were up 7%.
Liquor sales were down 1.1% year on year to $842 million, impacted by ongoing softness in the liquor market with consumers focused on value, the company said.
The context: CEO Leah Weckert said the group continues to see positive results from its major transformation projects. She picked out Coles' eCommerce result as a particular highlight for the period, while its 'Simply Liquorland' banner simplification program has seen improved customer engagement in its liquor segment.
The source: ASX
