Coles's Share Price on Worst Close in Five Months After Sales Disappoint

By David Winning

SYDNEY--Coles Group's share price falls 12% to be on course for its lowest close in five months after recent sales disappointed and it warned that rising fuel costs would hurt its profits.

Coles said same-store sales at its supermarkets rose by 2.7% in the 13 weeks through Sept. 27 compared to a year ago, and by 3.6% on a total basis.

It added that cost-of-living pressures and elevated promotional activity by rivals have continued to be a headwind into October, as shoppers become more choosy on where they buy groceries in an effort to make their budgets stretch further.

Coles said on Friday that supermarket sales in October have eased compared to the growth achieved in its fiscal first quarter. Its share price plunged to A$20.75 in early trading on the Australian Securities Exchange, with analysts signaling deep cuts to their forecasts.

Coles also warned that rising fuel costs over the past two months would leave its mark on profits, as tensions continued to flare in the Middle East. Management signaled additional fuel-related costs in the first half of its fiscal year compared to the same period of fiscal 2026.

"As a result of the above, we now expect first-half Supermarkets earnings before interest and tax to be in line with the prior corresponding period," Coles said.

Citi said that fell short of its forecast of 8% growth in first-half Ebit, and consensus expectations of a 6% rise. Coles appears to be losing ground to chief rival Woolworths, which earlier this week reported a 6.9% rise in its food sales in Australia across the 14 weeks through Oct. 4.

"The downgrade appears to be driven by price investment as supermarket sales have clearly been impacted by Woolworths' pricing strategies," Citi analyst Adrian Lemme says.

Citi, which had a neutral call on Coles ahead of today's update, estimates the growth rate of Woolworths's Australian food sales at 4.5%-5.0% this month.

In a note to clients, Jefferies said Woolworths seems to be getting more support from suppliers, and that is providing it with a competitive advantage over Coles.

The key question for Coles's management therefore will be how can this be addressed, analyst Michael Simotas says.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

October 29, 2026 20:12 ET (00:12 GMT)