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Coles Group
(Sydney:COL)
Select Model
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Rating:63Neutral
Price Target:
AU$25.00
▲(5.26% Upside)
Action:Reiterated
Date:08/26/26
The score is driven primarily by steady fundamentals and improved cash generation, supported by a positive earnings-call outlook around supermarket execution, eCommerce profitability progress, and productivity gains. These positives are tempered by balance-sheet leverage, weak technical momentum signals, and a less supportive valuation (high P/E), with Liquor and higher near-term investment costs adding execution risk.
Positive Factors
Supermarket growth and margin expansion
The core supermarket business is gaining scale while expanding margins, indicating resilient demand and improving execution. Sustained sales growth and cost discipline should support earnings durability despite grocery retail’s structurally low-margin model.
Negative Factors
Elevated balance-sheet leverage
Leverage remains material for a low-margin retailer, increasing sensitivity to refinancing costs, lease expenses and any earnings downturn. Although equity has grown and facilities are available, debt limits financial flexibility if margins compress.
Read all positive and negative factors
Positive Factors
Negative Factors
Supermarket growth and margin expansion
The core supermarket business is gaining scale while expanding margins, indicating resilient demand and improving execution. Sustained sales growth and cost discipline should support earnings durability despite grocery retail’s structurally low-margin model.
Read all positive factors
Coles Group (COL) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$31.90B
Dividend Yield2.98%
Average Volume (3M)2.38M
Price to Earnings (P/E)29.6
Beta (1Y)0.06
Revenue Growth2.78%
EPS Growth0.88%
CountryAU
Employees115,000
SectorConsumer Defensive
Sector Strength42
IndustryGrocery Stores
Share Statistics
EPS (TTM)0.81
Shares Outstanding1,343,143,400
10 Day Avg. Volume2,316,402
30 Day Avg. Volume2,384,302
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)8.26
Price to Sales (P/S)0.71
P/FCF Ratio17.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$24.79Price Target Upside4.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)1.01
Revenue Forecast (FY)AU$47.10B
Coles Group Business Overview & Revenue Model
Company Description
Coles Group Limited functions as a leading retailer across Australia, with its operations divided into Supermarkets, Liquor, and Express segments. The company oversees 835 supermarkets, alongside its online platform, coles.com.au, which provides f...
How the Company Makes Money
Coles Group makes money mainly by buying goods from suppliers and selling them to customers through its store network and digital channels, earning a gross margin on the difference between retail prices and the cost of goods sold (after accounting...
Coles Group Earnings Call Summary
Earnings Call Date:Aug 24, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Mar 03, 2027
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: strong group earnings growth, robust supermarket performance, rapid and profitable eCommerce scaling (including EBITDA-positive CFCs), meaningful productivity delivery (A$311m SSI) and a healthy balance sheet supporting targeted growth investments. Material challenges were highlighted—primarily the weak Liquor segment (large EBIT decline and planned store closures), higher near-term implementation and CapEx costs (Capability Center and Victorian ADC), rising category-level inflationary pressure, and retail crime risks. While these lowlights are significant in areas, the breadth of core supermarket strength, eCommerce momentum, productivity gains and disciplined capital allocation outweigh the negatives, supporting confidence in the medium-term outlook.Positive Updates
Strong Group Financial Growth
Group sales revenue $45.6bn, +2.8% YoY. Excluding significant items, group EBIT +9.9% and NPAT +13.7%. Group EBITDA (ex-sig items) +7.1%. Earnings growth materially ahead of sales growth.
Negative Updates
Liquor Segment Underperformance
Liquor sales revenue declined -3.3% YoY and Liquor EBIT declined -47.8% to A$59m. Liquor EBIT impacted by softer top line and A$20m of one-off Simply Liquorland conversion costs. Big Box (warehouse) segment experienced material weakness (total-year decline ~15–20%); 30 store closures planned in FY'27 as part of portfolio remediation.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Group Financial Growth
Group sales revenue $45.6bn, +2.8% YoY. Excluding significant items, group EBIT +9.9% and NPAT +13.7%. Group EBITDA (ex-sig items) +7.1%. Earnings growth materially ahead of sales growth.
Read all positive updates
Company Guidance
Guidance focused on targeted, measurable investment and disciplined delivery: Coles enters FY '27 with sales in the first 8 weeks tracking Q4 FY '26 and e‑commerce penetration at 15.7% (Supermarkets e‑commerce was $5.6bn in FY '26, +26.4%, 13.6% penetration), CFC sales +30% and CFCs now EBITDA‑positive; operating CapEx for FY '27 is expected to be ~$1.55bn (including ~ $300m for the Victorian ADC), with the $880m Victorian ADC to process 4.6m cartons/week and automation benefits coming into train in FY '29–FY '30; management will invest an incremental $300m by end FY '28 to support ~45 new supermarkets (net space growth >2%) and ~150 renewals, expects ~30 Liquor store closures in FY '27 as part of the turnaround, and will deliver capability savings via SSI (FY '26 SSI $311m, cumulative $876m since FY '24 and on track to exceed $1bn by end FY '27, ~$1.9bn since FY '20) plus a Coles Capability Center with Accenture that begins FY '27 benefits and targets >$100m p.a. by end FY '29 (with $190m one‑off implementation costs in FY '27); balance sheet metrics support this strategy (lease‑adjusted leverage 2.3x, undrawn facilities $2.5bn, weighted average drawn debt maturity 4.4 years).Coles Group Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
56
Neutral
Cash Flow
73
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 45.72B | 44.35B | 43.68B | 40.59B | 38.34B |
| Gross Profit | 10.73B | 11.70B | 11.38B | 9.10B | 8.56B |
| EBITDA | 3.86B | 3.22B | 3.21B | 3.40B | 3.27B |
| Net Income | 1.09B | 1.08B | 1.12B | 1.10B | 1.05B |
Balance Sheet | |||||
| Total Assets | 22.83B | 20.29B | 19.87B | 20.49B | 21.17B |
| Cash, Cash Equivalents and Short-Term Investments | 568.00M | 705.00M | 675.00M | 597.00M | 589.00M |
| Total Debt | 9.89B | 10.33B | 10.07B | 8.97B | 9.78B |
| Total Liabilities | 18.89B | 16.49B | 16.25B | 17.13B | 18.05B |
| Stockholders Equity | 3.95B | 3.81B | 3.62B | 3.36B | 3.12B |
Cash Flow | |||||
| Free Cash Flow | 1.85B | 1.45B | 1.12B | 1.29B | 1.42B |
| Operating Cash Flow | 3.34B | 2.94B | 2.79B | 2.81B | 2.69B |
| Investing Cash Flow | -1.42B | -1.36B | -1.51B | -1.00B | -1.14B |
| Financing Cash Flow | -2.06B | -1.54B | -1.20B | -1.80B | -1.75B |
Coles Group Technical Analysis
Positive
23.75
Price Trends
23.59
Positive
22.90
Positive
22.09
Positive
Market Momentum
-0.06
Positive
57.54
Neutral
63.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:COL, the sentiment is Positive. The current price of 23.75 is above the 20-day moving average (MA) of 23.70, above the 50-day MA of 23.59, and above the 200-day MA of 22.09, indicating a bullish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 57.54 is Neutral, neither overbought nor oversold. The STOCH value of 63.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:COL.
Coles Group Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | AU$3.28B | 11.92 | 16.56% | 6.06% | 0.18% | -1.74% | |
63 Neutral | AU$31.90B | 29.59 | 26.38% | 3.06% | 2.78% | 0.88% | |
63 Neutral | AU$1.93B | 35.36 | 5.46% | 1.95% | 6.66% | ― | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
57 Neutral | AU$47.26B | 80.67 | 12.60% | 2.27% | 3.56% | 18.13% | |
57 Neutral | AU$4.60B | -4.24 | -29.99% | 8.46% | -12.18% | -347.47% | |
49 Neutral | AU$5.64B | 102.00 | 1.37% | 4.96% | 1.28% | -87.89% |
* Consumer Defensive Sector Average
AU:COL
Coles Group
24.03
0.77
3.31%
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Coles Group Corporate Events
Coles Files 2026 Corporate Governance Statement and Appendix 4G with ASX
Aug 24, 2026
Coles Group Limited has lodged its 2026 Corporate Governance Statement with the Australian Securities Exchange, providing a detailed account of how it complies with ASX Corporate Governance Council principles and recommendations. The statement is ...
Coles Group Releases 2026 Corporate Governance Statement
Aug 24, 2026
Coles Group Limited has released its 2026 Corporate Governance Statement, outlining the company’s governance framework for the current year. The document, authorised by the Board, is intended for investors and regulators monitoring ColesR...
Coles Group Publishes 2026 Full-Year Results and Expands Store Network
Aug 24, 2026
Coles Group has released its 2026 full-year results presentation to the Australian Securities Exchange, outlining its performance for the year and key operational developments. The release, authorised by the board, signals the formal disclosure of...
Coles lifts earnings and dividends as supermarkets and digital channels drive growth
Aug 24, 2026
Coles Group reported full-year group sales revenue of $45.58 billion for the 52 weeks to 28 June 2026, up 2.8 per cent, with group EBIT rising 9.9 per cent to $2.32 billion and NPAT excluding significant items increasing 13.7 per cent to $1.26 bil...
Coles Group Declares Full-Year Dividend of AUD 0.37 per Share
Aug 24, 2026
Coles Group has announced a full-year dividend of AUD 0.37 per ordinary share, covering the 12-month period ended 28 June 2026 and reinforcing its practice of returning cash to shareholders. The dividend will be paid on 22 September 2026, with an ...
Coles lifts underlying earnings and dividend in FY26 annual results
Aug 24, 2026
Coles Group has released its Appendix 4E and annual report for the year ended 28 June 2026, detailing modest revenue growth and stronger underlying profit performance. The retailer reported revenue from ordinary activities of $45.7 billion, up 2.8...
Coles Confirms Due Diligence on Potential Greencross Pet Wellness Acquisition
Jul 1, 2026
Coles Group has confirmed it is in talks with private equity firm TPG about a potential acquisition of Greencross Pet Wellness Company and is currently conducting due diligence on the business. The retailer emphasised it will only proceed with a d...
ACCC blocks Coles’ planned Kalgoorlie supermarket and liquor expansion
Jul 1, 2026
Australia’s competition regulator has blocked Coles’ plan to acquire a leasehold interest for a new full-line supermarket and liquor store in Somerville, a suburb of Kalgoorlie-Boulder. The ACCC concluded after a Phase 2 review that th...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.