Coles presented their third-quarter sales this morning. The market wasn’t expecting much, and they got it. A modest sales rise from a company that has much to be modest about.
Total sales in their continuing businesses were up 0.6% for the quarter. On a comparative store basis, sales fell 0.9% and are down 0.3% year to date. Last month, Woolworths announced an 8.8% lift in Q3 sales.
Coles’s reporting quarter ended on 29 April, while Woolworths’ quarter ended on 1 April. While exact comparisons with Woolworths aren’t possible in each business, it’s worth noting that Coles was up 3.2% in food & liquor, and a tiny 0.8% on a comparative store basis, while Woolworths rose 8.3%. The fuel business reported a decline of 7% “impacted by lower average fuel prices” according to the announcement. Woolworths Q3 fuel sales were up 9.2%.
Officeworks (+4.7%) and Target (+2.3%) were just okay. Kmart remains the dog with comp store sales falling 3.2% (Big W +17.7%)
The share price rose a little this morning, but long ago that ceased being driven by company performance.
Coles continues to talk up the progress it is making and the earnings guidance remains unchanged. It’s a bit like Colonel Klink — “We are winning the war”. Or was that George W?
Fort Fumble is working through abysmal morale; waiting for a new, and inevitably better, regime. It must be hard trying to run a shop with one arm holding up a white flag.
Rob Lake publishes Brandish — Retail Intelligence, a website and fortnightly newsletter