Coles Group Ltd (ASX: COL) shares are missing out on the market rebound on Tuesday.
At the time of writing, the supermarket giant's shares are down 2.5% to $20.56.
This compares to a 1.2% gain by the ASX 200 index this afternoon.
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Why are Coles shares underperforming?
Today's decline has been driven by the company's shares trading ex-dividend.
When a share trades ex-dividend, it means new buyers are no longer entitled to receive the company's next dividend payment.
In Coles' case, it has just gone ex-dividend for its latest fully franked interim dividend of 41 cents per share.
Because new buyers will not receive that upcoming dividend, the share price often falls by roughly the value of the dividend when the stock goes ex-dividend. That is why investors commonly see a decline in a company's share price on the ex-dividend date.
Shareholders who owned Coles shares before the ex-dividend date will still receive the dividend even if they sell their shares today.
The Coles dividend
Last month, Coles released a solid first-half result. For the 27 weeks ended 4 January 2026, the company reported group sales revenue of $23.6 billion, representing growth of 2.5% year on year.
Earnings also improved on an underlying basis. Group EBIT excluding significant items increased 10.2% to $1.23 billion, while underlying net profit after tax rose 12.5% to $676 million.
However, statutory net profit after tax fell to $511 million, reflecting significant items related to a Federal Court judgment linked to earlier Fair Work Ombudsman proceedings.
The strong underlying earnings growth was largely driven by the company's supermarkets division. Sales revenue in that segment increased 3.6% to $21.4 billion, while EBIT climbed 14.6% thanks to continued sales momentum and improved operational efficiency.
Online sales were also a highlight, with supermarkets eCommerce revenue increasing 27% during the half.
This ultimately allowed Coles to increase its fully franked interim dividend by 10.8% from 37 cents per share to 41 cents per share.
When is payday?
Eligible shareholders won't have to wait long until payday comes around. The company intends to make its payout later this month on 30 March.
After that, according to a note out of Bell Potter, a fully franked 34 cents per share final dividend is expected in August, bringing total dividends to 75 cents per share in FY 2026.
Bell Potter currently has a buy rating and $22.35 price target on Coles' shares.
