Coles Group (COL) H2 2024 earnings summary

Executive summary

• Achieved strong financial and operational results, with group sales revenue from continuing operations reaching $43.6 billion, up 5.7% year-over-year on a normalised basis, and NPAT of $1.1 billion, up 2.1% year-over-year.

• Strategic priorities delivered strong underlying EBIT growth of 7.3% for the Group and 10.5% for Supermarkets, with eCommerce sales up 30.1% in Supermarkets and 9.2% in Liquor.

• Opened and ramped up four automated distribution and customer fulfillment centers, with major automation projects reaching key milestones and both ADCs and CFCs operational from July.

• Delivered highest-ever team member engagement, advanced sustainability and inclusion initiatives, and reduced emissions by 1.5% from FY23 and 34.5% from FY20.

• Strategic investments included new automated distribution and fulfilment centres, milk processing facilities, and liquor store acquisitions.

Financial highlights

• Group EBIT from continuing operations (normalized) rose 5.7% to $2,057m; underlying EBIT up 7.3% to $2,175m.

• Reported NPAT from continuing operations increased 2.1% to $1,128m; underlying NPAT up 4.1% to $1,210m.

• Operating cash flow reached $3,589m with a 98% cash realization ratio.

• Fully franked total dividend declared at 68cps, up 3% year-over-year, including a final dividend of 32cps.

• Sales revenue increased 5.7% to $43.6 billion (normalized).

Outlook and guidance

• FY25 capital expenditure expected at approximately $1.2 billion, focused on renewals, new stores, and digital assets.

• ADCs expected to be fully ramped by Q3 FY25; CFCs ramping up with full benefits anticipated in FY26.

• Implementation costs for ADCs and CFCs to fall away in FY26, improving operating leverage.

• Supermarket sales revenue grew 3.7% in first eight weeks of FY25; liquor sales declined 1.4% (impacted by CrowdStrike outage).

• Depreciation, amortisation, and financing costs are expected to increase due to recent investments.