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Highlights
- Revenue and profit have shown steady growth
- High return on equity reflects capital efficiency
- Leverage levels warrant close attention
Coles Group Ltd (ASX:COL) has seen its share price climb 17.74% in 2025, signaling renewed attention toward one of Australia’s leading supermarket retailers. With a legacy dating back to 1914 and operations spanning supermarkets, liquor stores, and fuel services, Coles continues to play a vital role in the Australian retail landscape.
While often compared to Woolworths, Coles maintains its stronghold in the domestic grocery market, holding approximately 28% share. As a standalone listed company since 2018, Coles has earned recognition for financial discipline and operational reliability. Understanding a few core metrics can provide a clearer view of its underlying performance in 2025.
Revenue and Profit Trends
Coles generated $43,684 million in annual revenue, supported by a 3-year compound annual growth rate (CAGR) of 3.9%. While not explosive, the trend reflects a stable and incremental growth trajectory, which is often a hallmark of mature businesses in defensive sectors like retail.
Profit also paints a steady upward picture. From $1,005 million three years ago to $1,118 million recently, the CAGR stands at 3.6%. This profitability growth aligns with the company’s operational consistency and market reach.
Operational Efficiency and Margins
Coles reported a gross margin of 26.1%, indicating solid performance from its core retail operations before factoring in overheads. In a sector with slim margins and tight competition, this level reflects efficiency in procurement, pricing strategy, and inventory management.
Importantly, Coles delivered a return on equity (ROE) of 32.4% in FY24. This high ROE suggests that the company is generating strong value relative to shareholder equity, a promising sign for overall capital efficiency.
Balance Sheet Snapshot
The capital structure reveals some areas to monitor. Net debt currently stands at $9,394 million, and the debt-to-equity ratio is 278.4%, signaling significant leverage. While not unusual in capital-intensive industries, this level of borrowing does introduce sensitivity to interest rate changes and macroeconomic fluctuations. Nonetheless, stable cash flows and revenue can provide a cushion against such risks.
In 2025, Coles Group (COL) shows a combination of consistent revenue, healthy profitability, and strong capital returns. However, its elevated leverage profile makes financial discipline crucial going forward. For those watching the retail sector, Coles remains a key player with both strengths and challenges worth noting.
