Coles Group - Q3 FY2026 Earnings Analysis

Performance Highlights

Coles Group reported Q3 FY2026 group sales revenue of $10.7 billion, up 3.1% year-on-year, with supermarkets delivering $9.8 billion in sales, ahead of market benchmarks on a volume-led basis. Excluding tobacco, supermarket sales grew 5.7%, supported by eCommerce penetration expanding 226 basis points to 13.6% and comparable sales growth of 3.6%.

The standout operating driver was eCommerce, which grew 24.8% to $1.33 billion, with all fulfilment channels — click and collect, home delivery, and immediacy via an expanded Uber partnership — in double-digit growth. Own Brand also re-accelerated, with Exclusive to Coles sales up 7.3% and Coles Finest gaining 8.2%, while Flybuys active members rose 5% to 10.3 million and Coles Plus subscriptions surged 75%.

Management Outlook and Forward Catalysts

Management indicated Q4 supermarket sales momentum is broadly tracking in line with Q3, adjusted for Easter and Anzac Day timing, while flagging a direct fuel cost headwind of approximately AUD 10–15 million in Q4 from geopolitical-driven commodity price increases. Supplier cost-price increase requests are described as at or above COVID-era levels in some categories, signalling a more inflationary second half, though management expects no material earnings impact in Q4.

The central investor debate heading into Q4 and FY2027 centres on whether Coles can sustain gross margin discipline as supplier cost pressures broaden from fresh categories into packaged goods, while simultaneously absorbing liquor earnings deterioration from fixed-cost deleverage — with warehouse store sales down roughly 20% — against a backdrop of weakening consumer sentiment and a Westpac-Melbourne Institute index at a two-year low.