Coles Group (COL) H1 2025 earnings summary

Executive summary

• Group sales revenue rose 3.7% to $23,035 million for the half year ended 5 January 2025, driven by Supermarkets growth of 4.3% and modest Liquor growth of 0.8%.

• Underlying EBIT from continuing operations increased by 8.9% to $1,209 million, reflecting strong execution of strategic priorities and value campaigns.

• Automation, data, and technology investments enabled rapid response to demand spikes and improved customer experience, with new CFCs and ADCs supporting operational resilience.

• Interim dividend declared at 37.0 cents per share, up 2.8%, fully franked, with payment date 27 March 2025.

• E-commerce and loyalty programs saw robust growth, with Flybuys active members up 4.1% to 9.7 million.

Financial highlights

• Group EBITDA (excluding significant items) up 10.3% to $2,045m; underlying EBITDA up 12.5% to $2,137m.

• Underlying NPAT increased by 6.4% to $666 million.

• Supermarkets sales revenue up 4.3% to $20,629m; underlying EBIT up 11.0% to $1,169m; eCommerce sales grew 22.6% with penetration at 10.7%.

• Liquor sales revenue up 0.8% to $2,004m; EBIT down 20.2% to $67m, impacted by cost inflation and subdued market.

• Gross margin improved by 88 basis points in Supermarkets, supported by cost initiatives and reduced loss.

Outlook and guidance

• Supermarkets sales revenue grew 3.4% in the first seven weeks of Q3 FY25, with 8.3% growth on a two-year stack.

• Liquor sales revenue up 3.8% in early Q3, with continued focus on value and exclusive brands.

• FY25 operating capital expenditure expected to be approximately $1.3bn.

• Implementation costs for ADCs and CFCs to fall away in FY26, improving future profitability.

• Cash realisation ratio at 69% due to timing, expected to normalize to 100% for the full year.