Reporting Season

Coles half-year results: a pithy effort amid cycling elevated sales and covid

Tue 22 Feb 22, 3:39pm (AEDT)
Coles Supermarket

Key Points

  • Coles retained an interim dividend of 33 cents
  • Earnings margins were intact despite higher costs and covid expenses
  • Coles exhibited solid cost control, with gross margins improving 20 basis points to 26.1%

Coles (ASX: COL) has delivered a pithy half-year result as the company cycles through elevated sales and volatile business conditions. Coles stock was flat as the market opened, now 3.3% higher.

Financials at a glance 

  • Revenue of $20.6bn, up 1% 

  • Net profit of $549m, down -2% 

  • Interim dividend of 33 cents per share, flat on last year

The profit figure beat Bloomberg estimates of $506m and Bell Potter forecasts of $538.4m. 

Lockdowns prop up at-home consumption

Coles achieved comparable supermarket sales growth of 1.5% for the first-half, cycling the elevated 7.2% sales growth from the first-half of FY21. 

Coles experienced elevated sales in the first quarter and in the early part of the second quarter as a result of lockdowns across NSW, ACT and Victoria. 

Sales again increased in the lead up to Christmas as families celebrated the holidays together. 

Costs under control

Coles incurred covid-related costs of approximately $150m, up from $105m in the previous period. 

The company exhibited solid cost control, with gross margins improving 20 basis points to 26.1%. 

Coles said that supply chain and loss prevention initiatives partially offset covid costs in the first half.


Coles said the spread of omicron elevated supermarket sales in early January, before moderating later that month.

The company flagged a "significant variation" in sales performance between states and store locations, as a result of covid and floods in South Australia.

Initial impressions

Ord Minnett reiterated a Hold rating with a $17.80 target price (circa 3% upside).

Ord Minnett's initial impression was that both earnings and dividends were head of forecasts.

Coles exhibited encouraging cost control alongside a lower full-year capital expenditure program.

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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