By Andrew Starke
Wesfarmers has posted a 44 percent rise in full-year net profit with Cole’s food and liquor sales growth a strong contributor in the fourth quarter.
While Wesfarmers has commercial interests in retail, insurance, chemicals, energy and hardware, most eyes were on the Cole’s numbers at yesterday’s (Aug 20) results announcement.
Wesfarmers raised net profit to $1.535 billion in the year ended June 30, from $1.063 billion in the previous year – but below market expectations.
The Coles division, which comprises supermarkets, liquor, fuel and convenience goods, contributed $28.8 billion of the conglomerate’s $51 billion revenue for the year.
Wesfarmers said the trend over successive quarters in Coles’ food and liquor comparable store sales growth was encouraging in a year where Coles opened 31 new supermarkets, 32 liquor stores, nine Cole Express sites and two hotels.
A refurbishment program continued in all supermarkets, 80 Liquorland stores and 26 Coles Express sites.
The company’s liquor offering includes Liquorland, Vintage Cellars, 1st Choice and through its 95 hotels around the country. Nationwide, Coles has 775 liquor stores.
For the full year, total food and liquor store sales grew by 6.2 percent but fourth quarter growth of 7.3 percent, driven by increased customer numbers, suggest the division is on the right track.
“The turnaround of Coles continues to meet the company’s expectations with a stronger in-store offer driving increasing customer numbers and basket growth,” Wesfarmers said in a statement.
The company believes that liquor sales have benefited from “improved store service standards and significant reinvestment in lower prices”.
Shares in Wesfarmers were trading at $25.49 at midday today (Aug 21), down from $25.60 seven days ago.