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Coles Profits Fall Short Of Expectations, Share Value Slumps

Coles, the supermarket giant has posted a full net year profit of $1.09bn, up 4.8%, falling just short of market forecasts which predicted $1.12bn.

Shares fell 5.83% at 2.30PM, following the final dividends being held steady after a 4.8% rise in profit to $1.09bn.

The giant confirmed continuing activities fell 0.3% to $1.04bn, and revenue rose 5.2% to $41.83bn.

It saw growth in sales revenue, up 6.1% to $36.75bn, and liquor sales revenue was broadly flat, thanks to COVID cycling elevated demand in the previous year.

Group sales revenue from continuing and discontinued operations rose 5.3% to $41.47bn.

eCommerce sales for the full year increased by 1.1% to $2.8 billion (three-year growth of 116%).

Strong sales growth of 10.1% was delivered in the second half (17.4% growth in the fourth quarter) while sales in the first half declined by 6.6% as COVID behaviours normalised, and some customers returned to shopping in store, management claimed.

FILE PHOTO: Customers separated by protective plexiglass shields are seen in the self-service checkout area of a Coles supermarket following the easing of restrictions implemented to curb the spread of the coronavirus disease (COVID-19) in Sydney, Australia, June 17, 2020. REUTERS/Loren Elliott

During the last year, enhancements were made to the unified Coles app and website, including the capability to opt-in to substitutions at check-out in the website, the ability to apply a range of filters (e.g. dietary, brand) and integration of Flybuys offers in the app, driving loyalty and improving the overall user experience.

The group, who compete with mainstream media, reported that Coles’ media income increased by 27.0% with accelerated investment in product innovation, technology and talent, and the rebranding of the platform to ‘Coles 360.’

Total supermarkets price inflation for the year was 6.7%, moderating in the second half, with continued moderation in the fourth quarter to 5.8%.

Group earnings from continuing operations rose 1.8%, with support from its ‘Smarter Selling’ synergies, cost cutting program and a net reduction in direct COVID costs compared to last year.

Payable on September 27th, they also declared a flat final dividend of 30c per share.

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