Coles Group Limited has delivered solid operational performance for FY26, with underlying profit before significant items surging 13.7 percent to reach 1,255 million dollars. The retailer increased its full-year dividend to 78 cents per share, up from 69 cents in the prior year, signaling management confidence in sustained earnings power despite near-term cost pressures.
Revenue grew 2.8 percent to 45.7 billion dollars, reflecting steady demand across the Group’s supermarket and liquor operations. More importantly, earnings before interest and tax excluding significant items climbed 9.9 percent to 2,322 million dollars, outpacing revenue growth and indicating improved operational leverage. Reported net profit of 1,090 million dollars rose just 1 percent, with the gap to underlying earnings reflecting charges related to an award-covered salaried team member provision. This divergence underscores the one-time nature of the charge and reveals underlying business strength when temporary costs are stripped away.
The dividend increase carries particular weight for shareholders and signals management’s confidence in the business. The interim payout rose to 41 cents from 37 cents, while the final dividend climbed to 37 cents from 32 cents, representing a 13 percent year-on-year increase in total distributions. This magnitude of increase suggests management expects the 13.7 percent profit growth to be durable rather than cyclical. For income-focused shareholders, the rising payout also provides some inflation offset in an environment where real yields remain compressed. Coles operates its dividend reinvestment plan at nil discount, offering long-term holders an additional compounding avenue.
Net tangible assets per share increased to 1.28 dollars from 1.16 dollars, reflecting balance sheet resilience. The Group’s ability to simultaneously grow earnings, lift dividends, and build equity per share suggests the business is operating efficiently and that capital is being deployed productively. The analyst briefing scheduled for 10am AEST will provide deeper insight into cash conversion, capital intensity, and forward-looking commentary on comparable store sales and cost pressures.
Investors should monitor several themes from the detailed annual report. Labour cost inflation remains a headwind, as evidenced by the size of the award-covered provision. Competitive intensity in Australian grocery retail shows no signs of abating, particularly from discounters. Execution on supply chain modernisation, including the new Victorian Automated Distribution Centre referenced in prior reporting, will be critical to sustaining margin expansion. The stock trades against a backdrop of elevated interest rates and consumer caution, making execution visibility paramount. This announcement is price sensitive and has been identified as material by the Australian Securities Exchange.
A rules-based approach to leveraged ETFs
See how our quantitative strategy works and who it suits.
Explore the strategyBecome an authorised representative
Advise your clients under an established AFSL without building your own. Choose AR or CAR.
Become an AR or CARView the full ASX announcement (PDF)
About Coles Group Limited (ASX: COL)
Coles Group operates one of Australia’s two major supermarket chains along with liquor retail and convenience store businesses. It serves millions of Australian customers weekly across its store network.
If you would like to discuss this announcement, request a callback or call us on 1300 889 603.
Learn to trade with a plan
Our free 5-day course covers entries, exits and risk management.
Start the free courseBecome an authorised representative
Advise your clients under an established AFSL without building your own. Choose AR or CAR.
Become an AR or CAR