Coles (COL) sales helped by lockdows
Coles (COL) +2.73%
Out with first quarter numbers today with sales up 10% on the same period last year as the Aussies eat and drink more at home. Victoria was the main contributor to the 9.7% LFL sales growth for supermarkets given the more onerous lockdown conditions. Liquor also benefited with a very strong 17.8% LFL growth number while convenience added 10.2% on pcp. The big shift to online continued for both the supermarkets and liquor segments – online transactions were up over 100% in Victoria and +57% for the country as a while. Momentum had rolled over into the 2nd quarter though easing of restrictions in regional Victoria has led to growth ‘normalizing.’
Comparable sales for supermarket was tracking at +6.4% for the first four weeks. While sales growth is strong, it is unlikely to last post COVID – a theme that is pretty well understood by the market. Online growth is great, but margins are much slimmer here for the two large players so it may weigh on earnings growth into the half year. On just 3.5% FF yield it’s hard to get excited.
Coles (COL) Chart
