Coles reaps rewards of strong Christmas trading
Supermarket giant Coles expects to report solid earnings for the first half of FY20 after finishing strong with a better-than-expected Christmas period.
Provisional first half earnings before interest and tax are expected to be between $710 million and $730 million, hindered only by margin pressure in Liquor.
In a first half trading update on Thursday morning, Coles reported comparable sales growth of 2.0 per cent in Supermarkets, helped by strong growth in the second quarter of 3.6 per cent.
“The success of the Christmas campaign exceeded expectations,” the retailer said.
Supermarkets also benefited from not having the costs associated with the removal of plastic bags and increased flybuys promotions as experienced in FY19.
Liquor earnings, however, were down on the prior corresponding period as a result of margin pressure and the impact of additional promotional activity based on “strategic range reviews”.
The retailer will provide further details at its interim results on February 18.