The Coles Group Ltd (ASX: COL) share price increased around 2% after reporting its FY24 result.
Coles FY24 report
Here are some of the highlights from 12 months to 30 June 2024:
- Total sales increased 5.1% to $43.57 billion
- Underlying continuing operations EBITDA increased 8.7% to $3.77 billion
- Total EBITDA up 3.3% to $3.65 billion
- Total EBIT increased 3.7% to $2.04 billion
- Underlying continuing operations NPAT rose 9.9% to $1.2 billion
- Statutory net profit up 1.8% to $1.1 billion
- Final dividend per share up 6.7% to $0.32
- Full-year dividend per share up 3% to $0.68
Other highlights
The were a lot of different numbers reported by Coles. The supermarket company wants to be able to tell investors about its financial numbers with an apples to apples comparison. ‘Continuing operations’ refers to the fact that the business no longer owns the Coles Express.
The FY24 result includes 53 weeks rather than the typical 52 weeks. If FY24 had only been 52 weeks, total revenue would only have risen 3.2% and statutory profit would have dropped 4%.
Coles said its value proposition and loyalty offer is resonating with customers. The company also reported strong eCommerce sales growth of 30.1% for Coles supermarkets and 9.2% in the liquor division (on a normalised basis).
The company said its costs had been managed, there is a “favourable loss trajectory” (which includes theft), and improvements in availability. Its Simplify and Save to Invest benefits were $238 million, with a 44 basis point (0.44%) improvement in loss rate in the second half.
Coles reported the automated distribution centre (ADC) and customer fulfilment centre (CFC) programs reached key milestones with a full ramp-up of the Queensland ADC, and the construction of NSW ADC and both CFCs were completed during the year. All facilities were operational from July.
For FY24, the business reported there was total inflation of 2.5% for its supermarkets. After excluding the tobacco and ‘fresh’ categories, inflation was 3.4%.
Outlook for the Coles share price
In the first eight weeks of FY25, supermarket sales revenue grew by 3.7% with “positive volume growth and increasing momentum”. Liquor sales were down 1.4%, with the overall liquor market “remaining challenging”.
The supermarket business is optimistic about the customer benefits which its new logistics facilities are expected to deliver. It continues to work on the product loss with technology initiatives.
Coles is one of the better large ASX shares, in my eyes. Over the years, it’s delivering revenue growth, profit growth and dividend growth. That’s exactly what I like to see from one of Australia’s biggest companies.
It’s not going to shoot the lights out, but profit growth can help push the share price higher, while dividends boost the overall returns each year. It’s one of the more stable and resilient ASX dividend shares, in my opinion.
