Coles shares rise on better-than-expected profit
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More news: Shares in Coles Group jumped nearly 6% to $16.78 in early trading on the ASX after the supermarket giant reported a first-half profit of $589 million despite easing margins.
Coles profit drops as margins moderate
The news: Coles Group has posted a drop in half-year profit as slower price increases at its supermarket and liquor stores moderated margins.
The numbers: Net profit for the 27 weeks to 31 December 2023 fell 8.4% to $589 million, but was still ahead of analyst expectations.
Group revenue was up 3% to $22.27 billion, led by a 4.9% increase in supermarket sales.
The company declared an interim dividend of 36 cents a share, unchanged from a year ago.
In its main supermarkets business, earnings margins were down to 5.1% from 5.3% a year ago. Food and grocery inflation moderated slightly to 3% in the December quarter from 3.1% in the September quarter.
Supermarket earnings rose 1.6% from a year ago, while liquor earnings rose 5%.
The context: Coles and larger rival Woolworths have been in the spotlight in recent weeks amid inquiries into grocery prices. In a trading update, Coles said supermarket sales were up 4.9% in the first eight weeks of the March quarter, underpinned by volume growth and improvements in availability.
Liquor sales were down 2.2% over the same period as customers reduce discretionary spending.
The source: ASX announcement
