Coles Group (ASX: COL) has delivered a stronger underlying result for FY26, with rising supermarket sales and a sharp increase in online grocery demand helping the retailer navigate ongoing cost pressures and the fallout from its employee underpayment case.
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The supermarket giant reported statutory net profit of $1.09 billion for the year ended June 28, up 1% from the previous year. Underlying net profit, which excludes significant items, increased 13% to $1.26 billion.
The gap between the two measures largely reflects a $235 million significant item linked to the Federal Court judgment concerning Coles’ underpayment of workers. The $235 million provision associated with the underpayment case remains a significant reminder of the costs that can arise from past workplace practices. The issue has also affected executive remuneration, with CEO Leah Weckert forfeiting a $414,000 short term bonus connected to the matter.
The underlying result provides a clearer picture of the performance of Coles’ core retail operations, with supermarket sales continuing to expand despite a competitive grocery market. Supermarkets sales revenue increased 3.7% to $41.47 billion, while sales excluding tobacco rose 5.1%.
Online grocery remained one of the strongest parts of the business. Digital sales climbed 26.4% to $5.6 billion, with online now representing 13.6% of supermarket sales.
Liquorland sales fell 3.3% to $3.55 billion. The decline did moderate during the final quarter, when sales were down 2.5%. Weaker Liquorland performance highlights that Coles does not have the same momentum across all parts of its portfolio.
The result also comes with a meaningful shareholder return. Coles declared a final dividend of 37 cents per share, taking the total FY26 dividend to 78 cents per share, compared with 69 cents a year earlier, representing a 13% increase in the full year payout.
The continued expansion of online grocery sales will continue to be another important growth driver, while the higher dividend demonstrates Coles’ ability to return more capital to shareholders.
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