Coles Group has delivered solid first-half earnings growth, driven by strong supermarkets performance and accelerating eCommerce, while reported profit declined following a significant item linked to the Federal Court judgment in the Fair Work Ombudsman proceedings.
For the 27 weeks to 4 January 2026, group sales revenue increased 2.5 per cent to $23.6 billion, with reported EBIT (excluding significant items) up 10.2 per cent to $1.23 billion. NPAT excluding significant items rose 12.5 per cent to $676 million.
After significant items, reported NPAT fell 11.3 per cent to $511 million, reflecting a $235 million pre-tax ($165 million after tax) charge associated with the Federal Court judgment received in September 2025.
The board declared a fully franked interim dividend of 41 cents per share.
Snapshot: 1H FY26
- Group sales revenue: $23.6bn, +2.5%
- Group EBIT (excl. significant items): $1.23bn, +10.2%
- NPAT (reported): $511m, -11.3%
- NPAT (excl. significant items): $676m, +12.5%
- Interim dividend: 41cps, fully franked
Supermarkets drive earnings momentum
Supermarkets sales increased 3.6 per cent to $21.4 billion, with EBIT up 14.6 per cent to $1.23 billion. On an adjusted basis (excluding tobacco and the prior-year competitor industrial action), supermarkets sales growth was 6.1 per cent.
Gross margin improved 65 basis points to 27.8 per cent, supported by mix shift away from tobacco, annualised automated distribution centre (ADC) benefits, strategic sourcing and growth in Coles 360 retail media income. EBIT margin expanded 55 basis points to 5.8 per cent.
eCommerce continued to be a key growth engine, with supermarkets online sales rising 27.0 per cent to $2.8 billion and penetration lifting to 13.1 per cent. Coles expanded same-day delivery through its Melbourne and Sydney customer fulfilment centres (CFCs), installed robotic pick arms and auto frame loading technology, and deepened its Uber Eats partnership.
Inflation in supermarkets remained moderate at 1.8 per cent for the half, rising to 1.9 per cent in the second quarter, driven primarily by dairy and red meat.
CEO Leah Weckert said the result reflected “another strong set of results in a highly competitive operating environment,” with improved availability, customer experience metrics and the benefits of major ADC and CFC transformation investments flowing through.
Liquor declines amid competitive intensity
Liquor sales fell 3.2 per cent to $1.94 billion, with EBIT down 37.3 per cent to $42 million as competitive intensity increased, particularly in the large-format segment.
Adjusted for competitor industrial action and one-off simplification costs, liquor EBIT declined 16.7 per cent, with margin at 2.8 per cent.
Coles completed its ‘Simply Liquorland’ banner simplification program during the half, opening 11 new stores, closing nine, and completing 127 renewals. eCommerce penetration in liquor increased to 7.8 per cent (9.0 per cent including liquor sold through Coles Online).
Outlook: value remains critical
In the first seven weeks of the third quarter, supermarkets sales increased 3.7 per cent (5.3 per cent ex-tobacco), while liquor sales declines moderated to 2.5 per cent.
Weckert said value remains front of mind for customers, with the group focused on everyday value ranges, seasonal campaigns and loyalty offers, alongside continued investment in automation and digital capability.
The result underscores a familiar dynamic in the sector: supermarkets delivering operating leverage and digital scale benefits, while liquor remains exposed to subdued demand and heightened competition.
