Coles starts FY23 with modest sales growth

Coles (ASX:COL) reported its Q1 results for FY23 and these turned out positive for the company. The headline revenue growth figure was only 1.3%, but impressive in a time of high inflation and expenditure on hospitality higher than 12 months ago. 

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Coles records $9.9bn in sales

Coles’ revenue for the 13 weeks from 27 June to 25 September was $9.9bn. $8.8bn of this came from supermarkets, $836m from liquor and $284m from Express.

Liquor was down by 4.3% compared to the prior corresponding period which was inflated by lockdowns. But Express was 8.4% higher as people drove more than they could during lockdowns. Supermarkets was 1.6% higher than the prior corresponding period. 

Will the good times continue?

Coles’ results came in spite of the ‘Dropped & Locked’ initiative, which caps prices. In one sense, the results are positive.

But it is important to note, today’s results did not record mention bottom line figures, which would arguably give a clearer picture as to the impacts. Coles may not be as impacted by rising costs being a price setter, but it may be unable to avoid an impact altogether. Investors have sent shares down 1.8% this morning, arguably expecting a better result because supermarkets are the ultimate consumer staple category on the share market.

Coles (ASX:COL) share price chart (Graph: TradingView)

We think it will be interesting to compare its results to that of Woolworths, although its competitor reports on a different calendar so will not be updating shareholders until next month. 

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