Coles Group has reported FY26 group sales revenue of $45.58 billion, up 2.8 per cent, with EBIT excluding significant items up 9.9 per cent to $2.32 billion and NPAT excluding significant items up 13.7per cent to $1.26 billion. Supermarket margin expansion and automation benefits carried the result, while the liquor network shrank and earnings fell by almost half.
Statutory NPAT rose just 1.0 per cent to $1.09 billion after $235 million in significant items ($165 million after tax) booked against the September 2025 Federal Court judgment in the Fair Work Ombudsman proceedings. Total dividends were lifted 13 per cent to 78 cents per share fully franked, with a final dividend of 37 cents.
The result was carried entirely by Supermarkets. Liquor sales fell 3.3 per cent and segment EBIT dropped 47.8 per cent.
Supermarkets: margin, not volume
Supermarkets sales revenue rose 3.7 per cent to $41.47 billion, or 5.1 per cent excluding tobacco. Segment EBIT increased 12.2 per cent to $2.37 billion, with EBIT margin expanding 43 basis points to 5.7 per cent and gross margin up 37 basis points to 27.8 per cent.
The margin story is a supplier story. Coles attributed the gross margin gain to the mix shift away from tobacco (27 basis points), annualised benefits from its automated distribution centres, strategic sourcing, its Simplify and Save to Invest program and growth in Coles 360 retail media income. Those gains more than offset price investment and higher fuel costs in the second half. SSI delivered $311 million in benefits for the year.
Cost of doing business as a percentage of sales improved six basis points, including a 23-basis point improvement in the second half.
Private label continued to outgrow the branded portfolio. Exclusive to Coles sales rose 6.1 per cent, with Coles Finest up 9.2 per cent and double-digit growth in the Ultra cleaning and PerFORM high protein convenience meals ranges. Coles added exclusive supply partnerships with M&S, Grill’d and Gami during the year.
Supermarkets price inflation was 1.5 per cent for the year, 1.2 per cent excluding tobacco and 0.8 per cent excluding tobacco and fresh. Fourth quarter inflation was one per cent, with fuel, livestock and dairy cost increases partly offset by deflation in fresh produce and eggs on improved supply.
eCommerce sales grew 26.4 per cent to $5.6 billion, taking penetration to 13.6 per cent. The customer fulfilment centres turned EBITDA positive in their second year, helped by on grid robotic pick arms, auto frame loading and auto bagging.
Liquor: earnings halve, network contracts
Liquor sales revenue fell 3.3 per cent to $3.55 billion, with comparable sales down 3.4 per cent. EBITDA fell 19.1 per cent to $199 million and EBIT fell 47.8 per cent to $59 million, cutting EBIT margin 142 basis points to 1.7 per cent. Cost of doing business deteriorated 182 basis points.
Gross margin improved 40 basis points on strategic sourcing, promotional optimisation and retail media income, but inflationary cost pressure, fixed cost deleverages and $20 million in one off Simply Liquorland costs more than absorbed it.
Coles Group managing director and CEO, Leah Weckert, said the Liquor result was below expectations. The company has completed a strategic review and is executing a multi-year repositioning built on integrating food and drink, weighting the network toward supermarket co-locations and consolidating above-store functions.
The network is being cut. Coles opened 16 co-located liquor stores and closed 26 in FY26, taking the fleet to 988. In FY27 it plans roughly 20 openings and 30 closures as part of a staged exit from non-strategic sites. The convenience portfolio, more than 90 per cent of the footprint at 895 Liquorland and Liquorland Cellars stores, grew for the year.
Supply chain and capital
External construction of the $880 million Victorian ambient ADC is complete, with automation partner Witron now installing the fit-out. The project remains on time and on budget, with commissioning expected by FY30. Once running it will process 4.6 million cartons a week, about 15 per cent more than the New South Wales and Queensland ADCs, servicing Victoria and Tasmania and integrating into South Australia and Western Australia.
Coles will spend approximately $1.55 billion in capex in FY27. A further $300 million by the end of FY28 will fund about 45 new supermarkets and 150 renewals over two years plus technology simplification.
In early August the company signed an expanded partnership with Accenture to establish the Coles Capability Centre, at a cost of about $190 million in FY27 including dual running and redundancies. Benefits are expected to start in FY27 and reach an annualised run rate above $100 million by the end of FY29.
The Viva Energy product supply arrangement, reported in Other, expires in November 2026. Revenue from it fell 19.6 per cent to $561 million as volumes wound down.
Outlook
Sales growth in the first eight weeks of FY27 was consistent with the fourth quarter. Coles said momentum was well ahead of 4Q26 in the opening weeks before a competitor collectibles campaign in late July and early August caused a temporary moderation, with sales recovering afterwards. eCommerce penetration reached 15.7per cent over the period. In Liquor, the sales trajectory strengthened relative to the fourth quarter, with the convenience portfolio still positive and warehouse performance improving.
