Australia’s No. 2 grocer Coles Group Ltd (COL.AX) said first-half profit beat analysts’ forecasts as reduced pandemic-related spending offset inflation, but it warned rising wages and energy bills continue to push up costs, sending its shares lower.
After barnstorming sales during COVID-19 lockdowns, Coles and larger rival Woolworths Group Ltd (WOW.AX) have borne the brunt of a changing economy as Russia’s invasion of Ukraine drives up power bills and a shortage of workers elevates wages.
Extreme weather events that have wiped out crops and flooded freight roads and railways, limiting stock availability, have also made things worse for the two supermarket chains, which together ring up two-thirds of the country’s groceries.
On Tuesday, Coles said profit from continuing operations jumped 11.4% to A$616 million ($424.61 million) in the six months to end-December, just ahead of analyst forecasts.
But that was helped by a reduction in COVID-19 expenses since the same period a year earlier, the company said. Sales from continuing operations rose 3.9%, half the rate of inflation in the period, a sign that people were curbing spending, according to analysts.
This report’s information was first seen on REUTERS; to read more, click this link.
You must be logged in to post a comment.