Australia’s two largest supermarket chains reported full-year earnings on Tuesday, with Coles Group emerging as the more attractively valued option on key metrics despite Woolworths delivering a headline earnings beat.
Coles Group posted a 2.8% rise in revenue to AUD 45.58 billion for FY2026, broadly in line with expectations, while earnings per share came in at AUD 0.93, essentially matching consensus. The company’s forward price-to-earnings ratio stands at 23.5x, below Woolworths’ 30.4x, and its dividend yield of 3.1% exceeds Woolworths’ 2.3%. Gross margins have expanded over the past three years, reaching 27.1%, a 130-basis-point improvement.
Woolworths, the sector leader by market capitalization, reported revenue of AUD 71.54 billion, narrowly missing the AUD 71.76 billion consensus, but delivered an earnings per share beat of AUD 1.30 against a forecast of AUD 1.26. Its 12-month share price return stands at 19.6%, including a 4.04% gain on earnings day. However, the company’s debt-to-equity ratio of 371% remains exceptionally high, with short-term obligations exceeding liquid assets.
Both companies reported resilient earnings amid a cooling Australian economy and softer consumer spending. Woolworths maintains a 34-year streak of dividend payments, while Coles has increased dividends for seven consecutive years. Analysts note Coles’ stronger top-line growth, higher dividend yield, and lower valuation as comparative advantages, though Woolworths retains scale leadership and recent momentum.
