(Reuters) -Australia’s Coles Group (OTC:CLEGF) posted a marginal rise in its first-quarter sales on Thursday, boosted by higher contribution from its supermarkets section, owing to strong food volume growth as consumers increasingly opted for at-home consumption.
Shares of the grocer were trading 0.2% higher, as at 0037 GMT. Stock slipped as much as 1% earlier in the day to A$14.820, its lowest since March 13, 2020.
The Supermarkets division, Coles’ biggest revenue-generator, logged sales revenue of A$9.19 billion for the quarter, a 4.7% growth from a year-ago period, as easing prices boosted volumes.
Still, the revenue growth missed Jefferies’ expectation of a 5.8% rise and E&P Capital’s 5% estimate, and was also below bigger rival Woolworths’ Australian Food’s growth of 6.4%.
Consumers are increasingly opting for in-house consumption as 12 interest rate hikes since May 2022 exerted high living cost pressures on the consumers.
However, inflation at Supermarkets declined to 3.1% during the quarter owing to easing prices of fruits and vegetables, meat, seafood and bakery items, boosting volumes.
As a result, Coles’ group sales revenue came in at A$10.25 billion ($6.46 billion) for the 13-week period ended Sept. 24, higher than the A$9.89 billion reported a year ago.
The grocer added that it ramped up security measures to reduce total loss from stock loss, waste and markdown across supermarkets during the first quarter, and this will continue into the second quarter.
“Commentary in the release implies that while waste and markdown has improved, theft has not yet improved and may have continued to worsen,” analysts at Jefferies said.
Providing a preview into the second quarter, Coles said in the early part its Supermarkets and liquor divisions logged sales revenue growth broadly in line with the first quarter.
Woolworths, the country’s largest grocer, on Wednesday logged an increase in food sales in the first quarter as value-conscious shoppers seized on cheaper meat, fruit and vegetables, but warned of continuing living cost pressures.
($1 = 1.5855 Australian dollars)
Source: Economy - investing.com
