Coles sees earnings rise as shoppers seek home brand bargains

Coles saw its underlying earnings rise 2.4 per cent as it boosted sales at its supermarkets with seasonal campaigns during Christmas, Halloween and Black Friday and benefited from the troubles of its larger rival Woolworths, where a protracted worker strike left supermarket shelves bare.

Earnings before interest and tax rose to $1.1 billion in the six months to January 5, the supermarket chain said in a statement to the ASX on Thursday morning, declaring a 37¢ fully franked interim dividend to shareholders. Net profit fell 3 per cent to $576 million, weighed down by one-off costs in relation to a new Automatic Distribution Centre in Victoria.

The supermarket chain also announced the retirement of James Graham, its chairman since its shares started trading on the ASX in 2018, at the end of April. He will be replaced by former Westfield CFO and then-Scentre chief executive Peter Allen.

The stronger operational result was partially aided by a ramp-up in stock in Victoria and NSW during Woolworths workers’ industrial action late last year that Coles estimates delivered more than $100 million in extra sales and dragged down its bigger rival’s profits. Woolworths said on Wednesday its net profits slumped 20.6 per cent, driven down by lower grocery sales during the 17-day industrial action.

“We have had a strong focus on value, fresh quality and availability which has supported volume-led growth in supermarkets during the half,” Coles chief executive Leah Weckert said in the statement.

During late November, the grocery chain added more stock to shelves and bolstered team members in some Victorian and NSW stores being impacted by the industrial action at Woolworths.

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“Pleasingly, during this period both our Queensland and New South Wales [distribution centres] demonstrated their ability to ramp up quickly to support our Victorian distribution centres to maintain availability in store and online. These actions enabled the supermarkets network to generate approximately $120 million in incremental sales,” she said.

The nation’s second-largest supermarket also continued to invest in home brand products during the first half of the 2025 financial year by rolling out over 530 new products.