Coles shares slip as Woolworths collectibles campaign slows sales start

Coles Group has reported a softer-than-expected start to fiscal 2027, with its supermarket sales growth in the first eight weeks matching the 3.7% rise recorded in the fourth quarter of fiscal 2026. The figure, however, fell short of the Visible Alpha consensus estimate of 4.7% growth for the first half, signalling a weaker-than-anticipated beginning to the year.

The company attributed the slowdown primarily to rival Woolworths' Disney OOSHIES collectibles program, which temporarily weighed on sales at Coles' Supermarkets division during late July and early August. Momentum normalised after the promotion concluded. Woolworths is scheduled to report its full-year earnings on Wednesday.

Shares in Coles fell as much as 2.3% to A$22.12 on Tuesday, their lowest level since early June, before recovering to trade 0.2% lower. The broader S&P/ASX 200 index rose 0.4% during the session.

For the year ended June 28, Coles reported underlying net profit of A$1.26 billion, beating a Visible Alpha estimate of A$1.24 billion. Supermarkets sales revenue grew 3.7% to A$41.47 billion. On a statutory basis, full-year net income rose 1% to A$1.09 billion, impacted by a post-tax one-off charge of A$165 million related to employee underpayment.

The company declared a final dividend of 37 Australian cents per share, up from 32 cents a year earlier.

Looking ahead, Coles forecast total capital expenditure of A$1.55 billion for fiscal 2027, up from A$1.41 billion in 2026, and plans to invest A$190 million in a change programme, dual running, and redundancy costs.

"Given the softer-than-expected start to the year ahead and the higher capital expenditure guidance, we see the shares trading off today," said Tom Kierath, head of consumer research at Barrenjoey.