The Coles Group Ltd (ASX: COL) share price has jumped more than 8% after reporting its FY25 result.
Coles is one of the largest supermarket businesses in Australia, along with being a major player in the liquor space which includes Coles Liquor, First Choice, Liquorland and Vintage Cellars.
Coles FY25 result
Herea are some of the main highlights from the 12 months to 29 June 2025:
- Total revenue up 1.8% to $44.3 billion
- Underlying EBITDA (EBITDA explained) rose 7.5% to $4.05 billion
- Underlying EBIT increased 2.2% to $2.2 billion
- Underlying net profit after tax (NPAT) fell 2.4% to $1.18 billion
- Statutory net profit fell 3.5% to $1.08 billion
- Final dividend per share of $0.32, with no growth
- Annual dividend per share of $0.69 per share, up 1.5%
The key driver of the result was the supermarkets division because it’s so much larger than the rest of the other businesses in Coles Group.
Supermarket sales grew 2.4% to billion, though it increased 4.3% when normalised for 52 weeks. Total sales revenue rose 3.6% when normalised for 52 weeks with liquor sales only increasing by 1.1%.
Coles said that it experienced strong e-commerce sales growth, with a 24.4% increase for supermarkets and 7.2% for liquor. The company said that its major transformation projects (namely advanced warehouses) have fully transitioned and are delivering results across its supply chain and e-commerce offering.
The company also said that customer satisfaction scores increased for both supermarkets and liquor.
The company’s overall underlying net profit declined because financing costs increased 22.4% to $541 million., but on normalised 52-week basis, underlying net profit grew 3.1%.
Supermarket profitability
In EBIT terms, supermarket underlying EBIT rose 4%, or 8.3% when normalised for 52 weeks.
Interestingly, while the supermarket gross profit margin improved 79 basis points (0.79%) to 27.5%, the underlying cost of doing business (CODB) worsened by 59 basis points (0.59%) to 21.9%. Even so, this allowed the underlying EBIT margin to 5.5%.
The supermarket business reported that inflation excluding tobacco was 1.2% for FY25 and it was 0.2% excluding both tobacco and fresh.
Outlook for the Coles share price
The company said that in the first eight weeks of FY26, supermarket revenue rose by 4.9%, or 7% excluding tobacco. That’s a strong growth rate. This was supported by continued strength in its volumes as it invests in both the customer value and experience. Tobacco sales are being impacted by new tobacco legislation and growth in the black market. Liquor sales are flat in the first eight weeks of FY26.
Coles also said its e-commerce sales have benefited from investments in the digital offer.
The company said its automated distribution centre (ADC) program will deliver its first full year of annualised benefits.
It’s expecting to open approximately 12 new stores and close two. In liquor, it expects to open 19 new stores and close around 25.
While sales growth doesn’t automatically lead to higher profit, it’s a very good sign that FY26 could be another good year.
I think it’s a solid blue-chip to own for the long-term, though slow-and-steady growth is the most I’d expect due to its already-large size.
