Coles Reports $1.08 Billion Profit as Supermarkets Drive Growth, Liquor Lags

Aug 26, 2025

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Coles Group posted a $1.08 billion net profit for the 2025 financial year, as supermarket sales and digital investments lifted earnings while liquor revenue slipped in a subdued market.

The retailer reported group sales revenue of $44.35 billion for the 52 weeks ending June 29, a 3.6% increase on a normalized basis compared with the prior year. Supermarkets, which account for nearly 90% of revenue, grew sales by 4.3%, offsetting declines in liquor and fuel supply segments.

Group earnings before interest and tax rose 7.5% to $2.11 billion, while underlying net profit after tax rose 3.1% to $1.18 billion. Coles declared a fully franked final dividend of 32 cents per share, payable Sept. 22.

“We were clear that value, quality and availability remained important to our customers,” Coles Chief Executive Leah Weckert said. “We made good progress in each of these areas resulting in increased customer satisfaction scores and earnings growth.”

Weckert said the company’s investment in automated distribution and customer fulfillment centers had begun to deliver benefits in efficiency and online growth. The company launched its Kemps Creek automated distribution center in Sydney and opened two customer fulfillment centers in Melbourne and Sydney, shifting next-day delivery volumes through the new sites.

Supermarkets Lead Earnings
Supermarket sales rose to $39.99 billion, with growth across both transactions and basket size. Excluding tobacco, which slumped 30% during the year, sales were up 5.7%. Online grocery sales surged 24.4% to $4.5 billion, lifting digital penetration to 11.2% of supermarket revenue.

Customers responded strongly to Coles’ seasonal “Great Value, Hands Down” campaigns and continuity promotions such as Curtis Stone glassware and Harry Potter collectibles, the company said. Flybuys active members rose 4.4% to 9.9 million, with a 13.3% increase in point redemptions in supermarkets.

Supermarkets reported underlying EBIT of $2.21 billion, up 8.3% on a normalized basis.

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Liquor Struggles in Soft Market
Coles Liquor, which operates Liquorland, Vintage Cellars and First Choice, reported sales of $3.67 billion, up just 1.1% on a normalized basis. Underlying EBIT fell 10.1% to $121 million.

The company cited cost-of-living pressures and subdued consumer spending for the weak performance. Liquor comparable sales fell 1.3%.

In response, Coles began simplifying its liquor business by consolidating banners under the Liquorland brand. By year’s end, 52 stores had been converted, with positive early sales and customer satisfaction results, the company said.

Cost Controls and Weather Events
Coles delivered $327 million in savings through its four-year “Simplify and Save to Invest” program, on track to achieve $1 billion in benefits. The company said it also improved its total loss rate by 25 basis points.

Severe weather, including Cyclone Alfred and floods in Queensland and northern New South Wales, caused temporary store closures and increased costs. Weckert acknowledged staff efforts during the crises. “Our more than 115,000 team members are critical to the success of Coles. They often go above and beyond to support our customers and serve our local communities,” she said.

Balance Sheet and Capital Spending
Net cash flow from operations rose to $3.98 billion, while net capital expenditure fell to $1.32 billion from $1.42 billion the prior year. Coles ended the year with net assets of $3.81 billion and a lease-adjusted leverage ratio of 2.6 times.

The company issued $300 million in medium-term notes in April to extend debt maturities, leaving it with undrawn facilities of $2.6 billion.

Sustainability and Workforce Engagement
Coles reported a 71.4% reduction in Scope 1 and 2 emissions year-on-year, an 81.3% reduction compared with its 2020 baseline. It achieved its highest employee engagement score to date, placing in the top quartile of Australian companies with more than 5,000 staff. Women held 42.7% of leadership roles, and 3.5% of team members identified as Aboriginal or Torres Strait Islander.

The retailer contributed $40.2 million in community support and donated the equivalent of 39.1 million meals to food relief groups SecondBite and Foodbank.

Outlook
In the first eight weeks of fiscal 2026, supermarket sales rose 4.9% and 7% excluding tobacco. Liquor sales were flat.

“As we enter FY26, we are again clear on the priorities for the year ahead,” Weckert said. “Ensuring our value proposition resonates with customers, delivering consistent quality and availability, continuously improving customer experience in-store and online, and maintaining a laser focus on costs.”

Coles plans to open about 12 new supermarkets and renew 70, while adding 19 liquor stores and closing 25, including 15 under the Liquorland simplification. Capital spending is projected at $1.2 billion, including investments in store renewals, digital technology and a new distribution center in Truganina, Victoria.

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