The Coles Group Ltd (ASX: COL) share price is seeking direction, flipping from small gains to small losses in early morning trade.
Shares in the S&P/ASX 200 Index (ASX: XJO) consumer staples retail giant closed yesterday trading for $18.46. Shares are currently changing hands for $18.43.
This comes following the release of the company's third-quarter sales results, covering 2 January to 26 March (3Q23).
Read on for the highlights.
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Coles share price wobbles despite strong sales growth
- Total group sales revenue of $9.67 billion, up 6.5% from 3Q22
- Supermarket sales revenue increased 7.0% to $8.60 billion
- Liquor revenue increased 2.6% year on year to $801 million
- 7% year-on-year eCommerce sales growth in supermarkets, 28.9% growth in liquor
- Own brand sales revenue growth of 11.4% exclusive to Coles
What else happened during the quarter?
Coles reported that total supermarket price inflation over the quarter came in at 6.2%. That was far higher than the 3.3% reported in 3Q22. But it came in below the 7.7% inflation recorded in the last quarter (2Q23).
In a nod to consumers pressured by that inflation, Coles doubled the size of its 'Dropped & Locked' value campaign. The price on more than 300 products has now been dropped and locked in. This helped drive the quarterly sales growth, which has yet to lift the Coles share price today.
Coles also continued with its tailored store format strategy, reporting 41 liquor store renewals.
And on 27 March, the retail giant achieved its first outbound delivery to store at its new Redbank, Queensland Automated Distribution Centre (ADC). That ADC officially opened yesterday.
Coles said progress is continuing with installation activities at its New South Wales ADS, in Kemps Creek.
During the quarter, Coles opened one new store and closed two stores. It currently has a total network of 841 supermarkets.
What did management say?
Commenting on the results that are seeing the Coles share price vacillate today, CEO, Steven Cain said:
At a time when cost of living pressures are mounting for many customers, the unique combination of Australia's largest own brand range, hundreds of dropped and locked prices, thousands of weekly specials, free Masterchef cookware and Flybuys points has successfully driven sales and volume.
Pleasingly we saw some modest improvement in supply chain availability however there is still more to do.
On Monday Cain will hand the reins of the 109-year-old company over to incoming CEO, Leah Weckert.
"I know that the best is yet to come," Cain said.
What's next?
Looking at what might impact the Coles share price in the months ahead, the company expects supplier input cost inflation to keep easing in the fourth quarter. That's mostly due to exceptionally high levels of inflation in the prior corresponding period.
Coles said it remains on track to deliver cumulative Smarter Selling benefits of $1 billion across the four-year program by the end of FY23. And the company also is on track to renew 40 supermarkets in FY23.
As for the sale of its Coles Express fuel and convenience business, Coles reported it has satisfied all closing conditions for the sale to Viva Energy. Management expects the transaction will be complete by the end of May.
Coles share price snapshot
The Coles share price has been a strong performer in 2023, up 12% year to date.
