Earlier today, we looked at the miserable performance of Woolworths Group Ltd (ASX: WOW) over September. Last month saw the 'Fresh Food People' lose a nasty 7.3%. It's arguably only fair to check out its arch-rival Coles Group Ltd (ASX: COL), and dig into how the Coles share price navigated a choppy September.
As we discussed this afternoon, September wasn't a great month for most ASX 200 blue chips. The S&P/ASX 200 Index (ASX: XJO) ended up dropping by 1.4% over the month just gone. Given this environment, it was always going to be tough for a prominent stock like Coles to beat the market and record a positive performance.
But let's get to the numbers. So the Coles share price began September at $23.88 and actually hit a new record high of $24.28 on 1 September. Unfortunately, though, it was all downhill from there. By the time trading wrapped up yesterday afternoon, Coles stock had closed at $23.29. That means that the company recorded a loss of 2.47% for the month.
Obviously, that's a lot better than Woolworths managed. Even so, it makes Coles a market laggard for September.
Image source: Getty Images
Why did the Coles share price slump 3.8% last month?
Well, it probably comes down to a couple of factors. The first is the price of Coles shares themselves.
Coles entered September coming off one of its best months in a long time. August saw Coles stock jump a huge 15.14%, driven mainly by its well-received full-year earnings report from 26 August. Unlike Woolworths' report, Coles' showed all the important numbers moving in the right direction, which was enough to push the company up more than 8% on the day it came out.
However, with that new record high in early September, many investors may have decided that a 20% year-to-date gain was enough to take some profits off the table. Some ASX brokers were also starting to tell clients that it might be time to cash in, one being Shaw and Partners.
Another likely culprit behind the Coles share price's lousy month was the update from the Federal Court on 5 September regarding the class action against Coles for the historical underpayment of some of its workers.
Following this update, the supermarket giant told the market that "Coles' preliminary estimate is that further remediation of between $150m and $250m may be required to reflect the findings of the Court, including interest and on-costs".
Not exactly news that shareholders would rejoice at hearing.
After a rough month, no doubt Coles investors will be hoping October is kinder to them. But we shall have to wait and see.
