Coles shares rise as strong supermarket sales offset financial year profit loss

Investing.com - Shares in Australian grocery chain Coles rose on Tuesday after pointing to sustained strong sales in its core supermarkets division. This helped investors ignore lower than expected earnings for the 2025 fiscal year.

Coles Group (ASX:COL) shares were up 8.2 percent at 22.42 Australian dollars as of 21.04 ET (01.04 GMT), outpacing the 0.4% drop on the ASX 200.

The company noted that supermarket sales revenues increased by about 5% in the first eight weeks of the current financial year, signaling a positive start to the period. Excluding tobacco products, which are a constant burden on Coles' sales, supermarket revenues increased by 7%.

The development comes after Coles recorded a 1.8% increase in group revenue in the 12 months to June 30. Net profit fell 3.5 percent to A$1.08 billion ($650 million), below Reuters' forecast of AU$1.11 billion.

The stronger revenue was mainly due to the strong performance in non-tobacco sales in Coles' supermarkets division. However, this was partially offset by higher operating costs, especially in the areas of financing and leasing.

Shares in Coles, Australia's second-largest grocery chain after Woolworths, have risen as signs of a strong start to the current financial year have largely offset average earnings for the 2025 financial year.

Woolworths Ltd (ASX:WOW) shares rose 2.4%. The grocery giant will announce its annual earnings on Wednesday.

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