Coles (ASX:COL) share price climbs following FY21 results

Here's how Coles performed in FY 2021…

| More on:
Man racing shopping trolley through supermarket likes coles or woolworths

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Coles Group Ltd (ASX: COL) share price is moving higher this morning after the blue-chip company reported its full-year earnings for FY21. Following its latest results, investors are bidding up shares in Australia's retailing giant.

Coles share price climbs after solid result

What happened in FY21 for Coles Group

During the 12 months ending 27 June 2021, Coles Group delivered a solid performance despite continued disruptions. Year-over-year growth across the company's revenue and earnings might be positive for the Coles share price today.

According to the release, Coles achieved a 3.1% increase in sales revenue to $38,562 million in FY21. This was supported by unwinding in local shopping and continued strength in Cole's eCommerce segment. In fact, the financial period saw eCommerce sales contribute $2 billion in revenue. Positively for the Coles share price, this represented a significant increase of 52% on the prior year as more shoppers resort to online purchasing during lockdowns.

Meanwhile, the Coles liquor division also benefitted from the eCommerce shift. Liquor revenue increased 6.6% year-over-year to $3,525 million. Despite easing on-premise consumption restrictions, more consumers opted to purchase online with larger orders. This also followed Coles' refreshed liquor strategy of being a simpler, more accessible, locally relevant drinks specialist.

Moving to the bottom line, Coles' net profit after tax rose 2.8% to $1,005 million in FY21. The retailing giant combatted a challenging period by implementing 'Smarter Selling' benefits during the year. During FY21, Coles achieved $300 million in benefits by leveraging data and technology.

As a result, the board declared a fully franked final dividend of 28 cents per share. The dividend's record date will be 27 August 2021, with payment made on 28 September 2021. Based on the current Coles share price, the total year's dividend represents a yield of ~3.29%.

What did management say?

Commenting on the result, Coles Group Chairman James Graham said:

The result highlights the commitment of the Group to grow trust and shareholder value in a year marked by extraordinary community and business challenges. Pleasingly, significant progress has been made in the development of new operating systems and the investment in new technology platforms which will further strengthen our long-term performance.

Further to this, Coles Chief Executive Officer Mr Steven Cain said:

Whilst the COVID-19 Delta variant is presenting some new challenges, I would like to thank all levels of government for continuing to work with us to help keep our customers, team members and the community safe, including by providing priority access to vaccines in some critical areas. In February, we said the short-term outlook would be dependent upon the efficacy and pace of the vaccination program. Six months on, government forecasts are pointing to a more normal outlook from early in calendar 2022 including the longer-term prospect of increased migration.

What's next for Coles?

Looking ahead, Coles noted the early part of the first quarter has remained volatile as COVID-19 outbreaks continue to result in lockdowns. As snap lockdowns increased, local shopping trends have re-emerged, which is not so positive for the Coles share price. However, the company expects a normalisation in consumer behaviour in 2022 due to the vaccination rollout.

Furthermore, FY22 is slated to be a year of expenditure. Coles plans on committing $290 million during the financial year for its Queensland facility. In addition, various other facilities across the country will have money spent on them to drive growth and efficiencies.

Coles share price recap

The Coles Group share price fell 1% over the past year. In contrast, the S&P/ASX 200 Index (ASX: XJO) climbed 22.7%. Although, in the past 6 months Coles has been on a positive trajectory — gaining nearly 14%.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

rising gold share price represented by a green arrow on piles of gold block
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 kept up the selling this Wednesday, with another day in the red.

Read more »

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Westpac stock: Should you buy the 5.5% yield?

Is Westpac an easy buy today for that 5.5% yield?

Read more »

A young woman wearing a blue and white striped t-shirt blows air from her cheeks and looks up and to the side in a sign of disappointment after the ASX shares she owns went down today
Share Fallers

Why Australian Strategic Materials, Boral, Dubber, and Macquarie Technology are falling today

These shares are having a tough hump day. But why?

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Is Core Lithium stock a good long-term investment?

Is this lithium dog a buy-the-dip opportunity today?

Read more »

Share Gainers

Why Bank of Queensland, DroneShield, Evolution Mining, and Lynas shares are storming higher today

These ASX shares are having a very strong session on hump day.

Read more »

Man looking concerned head in hands at laptop
Share Market News

Worried about an ASX stock market crash? Here are 5 reasons AMP says the bull market has legs

Despite the potential for a pullback, the ASX bull can keep on running, says AMP.

Read more »

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.
Dividend Investing

Is Telstra stock a smart buy right now for dividends?

Would I buy Telstra shares for that hefty dividend yield today?

Read more »