Coles Group Limited (ASX: COL) delivered a stronger FY26 earnings performance as supermarket momentum, digital expansion and tighter cost management lifted profitability. Announced on 25 August 2026, the results showed Group sales revenue rising 2.8% to AU$45.58 billion, while EBIT excluding significant items increased 9.9% to AU$2.32 billion. NPAT excluding significant items climbed 13.7% to AU$1.26 billion, although statutory NPAT rose a more modest 1.0% to AU$1.09 billion.Highlights:

• Earnings accelerated: Underlying NPAT jumped 13.7% as profit growth comfortably outpaced sales.
• Digital gained momentum: Supermarket eCommerce sales surged 26.4% to AU$5.6 billion.
• Liquor remains the test: EBIT plunged 47.8%, sharpening focus on the turnaround strategy.

Supermarkets Drive EarningsSupermarkets remained the core earnings engine, with revenue increasing 3.7% to AU$41.47 billion and EBIT advancing 12.2% to AU$2.37 billion. The segment’s EBIT margin expanded 43 basis points to 5.7%, supported by operating leverage, productivity initiatives and disciplined cost control.

Digital growth was particularly notable. Supermarket eCommerce revenue reached AU$5.6 billion, lifting penetration to 13.6%. Coles’ Customer Fulfilment Centres also achieved positive EBITDA in their second year, indicating that rapid online expansion is increasingly translating into profitability.

Coles generated AU$311 million in Simplify and Save to Invest benefits during FY26, providing additional capacity to fund investment in stores, automation and technology.Liquor Clouds PerformanceThe Liquor division remained a weak spot. Revenue declined 3.3% to AU$3.55 billion, while EBIT dropped 47.8% to AU$59 million. Cost-of-living pressures, softer consumer sentiment and intense promotional activity weighed on performance. Coles has completed a strategic review and is pursuing network optimisation, a simpler operating model and a more integrated food-and-drink proposition.Dividend and FY27 OutlookShareholders will receive a fully franked 37-cent final dividend, taking FY26 dividends to 78 cents per share, up 13%. The final payment is scheduled for 22 September 2026.

Looking ahead, Coles enters FY27 with supermarket market-share momentum, profitable digital scaling and a stronger productivity base. However, execution on the Liquor turnaround and returns from increased investment will be important tests. Management plans to accelerate store openings and renewals while continuing investment in automation and technology, positioning operational execution as the key determinant of whether FY26’s earnings momentum can be sustained.Note- All data presented is based on information available at the time of writing.Disclaimer for Kapitales ResearchThe materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise. 

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