Coles Group Ltd (ASX: COL) shares are pushing higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed yesterday trading for $21.97. In late morning trade on Thursday, shares are changing hands for $22.12 apiece, up 0.7%.
For some context, the ASX 200 is up 0.5% at this same time.
Taking a step back, Coles shares have strongly outperformed the benchmark over the past year, gaining 26.3% compared to the 7.9% 12-month gains posted by the ASX 200.
And that's not including the two fully franked dividends totalling 69 cents a share that Coles paid out over the full year. At the current share price, this sees Coles stock trading on a fully franked trailing dividend yield of 3.1%.
Looking ahead, however, Alto Capital's Tony Locantro sees headwinds building for the company following on this strong run (courtesy of The Bull).
Image source: Getty Images
Time to take profit on Coles shares?
"The supermarket giant reported a solid result in full year 2025," said Locantro, who has a sell recommendation on Coles shares.
Commenting on those results, Locantro said:
Supermarket sales revenue grew by 4.3% on a normalised basis when compared to the prior corresponding period. Liquor sales were up a modest 1.1% in response to cost-of-living pressures. Total group sales revenue was up 3.6% on a normalised basis.
And Coles continued to post sales growth in Q1 FY 2026.
"In the first quarter of fiscal year 2026, total group sales revenue, released on October 30, was up 3.9% on the prior corresponding period," Locantro said.
But noting that the company's share price climbed from $18.47 on March 19 to trade at $22.055 on October 30 (and at $22.12 today) Locantro raised the sell flag.
"Coles has enjoyed a good run, so we would be inclined to take some profits given cost-of-living pressures are persisting in a relatively slow growing economy," he concluded.
A word from the CEO
Amid high investor expectations, Coles shares closed down 2.6% on 30 October, despite the company reporting the 3.9% sales revenue growth Locantro mentioned above.
Total sales for the three months came in at $10.96 billion.
Commenting on those results on the day, Coles CEO Leah Weckert said, "We are pleased with our performance over the quarter with Supermarket sales growth reflecting the focus we have had on value, quality and the customer experience."
Weckert added:
We continue to see positive results from our major transformation projects with availability reaching its highest levels since pre-COVID and eCommerce sales penetration reaching 13.3%.
In Liquor, we made significant progress with our 'Simply Liquorland' banner simplification making our network more accessible to a broader audience and delivering a positive impact on sales.
