Finance Consumer Coles reports bumper $1.1bn full-year profit

Coles reports bumper $1.1bn full-year profit

coles full year 2021
Coles says trading is returning to normal – but it has still enjoyed a 3 per cent sales bump. Photo: AAP
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Coles’ sales growth is continuing to slow in the first few weeks of the current financial year as trading returns to normal levels and as lockdowns in major cities drag.

The supermarket giant said on Wednesday trading had been mixed in the current quarter, with supermarket sales up 1 per cent in the first seven weeks of FY 22.

Liquor sales were flat while fuel sales at the Express convenience store business were hit by lockdowns.

“Conditions in the early part of the first quarter remain volatile as outbreaks of the COVID-19 Delta variant have led to multiple lockdowns across the country,” the company said in a statement.

By 1200 AEST, Coles shares were up 0.2 per cent to $18.36 each.

For the 52-week period to June 27, the retailer reported sales up 3.1 per cent to $38.56 billion – about half the rate at which they grew in 2020.

Full-year profit rose 7.5 per cent to $1.01 billion.

Sales at its main supermarket division were up 2.6 per cent to $33.85 billion, liquor sales rose 6.6 per cent to $2.5 billion, while Coles Express sales jumped 7.7 per cent to $1.2 billion.

Online sales surged 52 per cent to $2.1 billion.

Coles had double-digit sales growth in the early stages of the pandemic last year as an impending lockdown due to COVID-19 triggered panic-buying by shoppers.

Consumer behaviour had since started to normalise, with customers returning to shopping centres and increased shopping trips as well as improved transaction growth.

But repeated lockdowns and tighter restrictions on mobility in recent months have dented the momentum.

Full-year earnings for all the divisions remained strong, with supermarkets profits increasing 5.2 per cent to $1.7 billion, liquor earnings up 19.6 per cent to $165 million, and Coles Express earnings doubling to $67 million.

Virus-related costs were down and the retailer delivered gains of $300 million through cost reductions.

Chief executive Steven Cain said the ongoing vaccination rollout would be beneficial in shoppers returning to normal behaviour as it would mean fewer lockdowns.

Coles has declared a fully-franked final dividend of 28 cents per share, slightly ahead of the 27.5 cents it paid a year earlier. That brings the full-year dividend to 61 cents, a 6 per cent increase on the prior year.