Coles Group (ASX:COL) reported a 13.7% increase in net profit after tax to A$1.255 billion for the fiscal year ended August 25, 2026, outpacing revenue growth as digital transformation drove profitability. Group sales rose 2.8% to A$45.6 billion, while earnings before interest and tax (EBIT) excluding significant items climbed 9.9% to A$2.322 billion.
The supermarket segment led performance, with sales reaching A$41.5 billion—a 3.7% increase year-over-year, or 5.1% excluding tobacco. EBIT for supermarkets grew 12.2%, expanding margins by 43 basis points to 5.7%, supported by gross margin growth of 37 basis points to 27.8%. Managing Director and CEO Leah Weckert highlighted progress in customer value and market share gains, stating that the company had strengthened its competitive position over the past three years.
Digital channels were a key driver, with eCommerce sales surging 26.4% to A$5.6 billion, representing 13.6% of supermarket sales. This penetration rate rose to 15.7% in the first eight weeks of fiscal 2027, according to company data. Weckert noted that eCommerce was scaling profitably, aligning with broader strategy to enhance convenience and value for customers.
The liquor segment underperformed, with sales declining 3.3% to A$3.5 billion and EBIT collapsing 47.8% to A$59 million. The segment’s EBIT margin contracted by 142 basis points to 1.7%, including A$20 million in one-off costs related to the conversion of Simply Liquorland stores. Coles plans to close 30 liquor stores in fiscal 2027 as part of ongoing restructuring.
Profitability was further supported by productivity initiatives, with the Simplify and Save to Invest (SSI) program delivering A$311 million in savings during FY26, bringing cumulative benefits to A$876 million since FY24. The program targets over A$1 billion in savings by FY27, while combined SSI and Smarter Selling initiatives have generated A$1.9 billion since FY20. Capital expenditure totaled A$1.406 billion, including A$1.189 billion in operating capex and A$217 million in net property investment.
Dividends increased 13% to 78 cents per share, fully franked, with a final dividend of 37 cents declared. The payout reflects a 13.7% rise in NPAT and a strengthened balance sheet, where leverage improved from 2.7x in FY24 to 2.3x in FY26. Credit ratings remained stable at Baa1 (Moody’s) and BBB+ (S&P Global Ratings), supported by A$2.5 billion in undrawn facilities.
Coles also outlined A$1.55 billion in targeted capital expenditure for FY27, including A$880 million for a third automated distribution center in Victoria, slated for commissioning in FY30. A one-off A$190 million investment in an Accenture partnership is expected to yield over A$100 million annually in run-rate benefits by FY29.
