Coles lifts sales, but shares dip


Coles Myer CEO John Fletcher called the sales figure a "solid performance"

Geoff Hiscock
CNN Asia Business Editor

SYDNEY, Australia (CNN) -- Australia's biggest retailer Coles Myer has lifted full-year sales almost 9 percent to Aust. $25.5 billion ($13.8 billion) but says its profits will likely grow at a slower rate.

Coles Myer will release its profit result for the year to June 30 on October 3.

It said on Thursday that net profit after tax will likely be at the "lower end" of the range of A$350 million to A$365 million ($189 million to $197 million) it announced on May 6.

Coles Myer chief executive John Fletcher called the result a "solid performance", given the scale of the group's rebuilding activity and the highly competitive nature of the Australian market.

Five-year low

But the stockmarket was unimpressed. Shares in Coles Myer closed 4.56 percent lower at A$5.86 Thursday, their lowest level since March 1997.

Arch-rival Woolworths put on 1.74 percent to A$12.27. The broader market, measured by the S&P/ASX200, rose 0.86 percent.

Coles Myer competes with Woolworths mainly for supermarket and liquor store business.

In the general merchandise and department store field, its Target, Kmart and Myer Grace Bros operations compete with BigW and upper-end retailers such as David Jones.

Fletcher said the group's earnings before interest and tax were expected to rise by about 6 percent from the previous year.

"At Myer Grace Bros, as a consequence of additional markdowns and marketing, together with a potential writedown of software assets, a loss for the full year is expected," he said in a statement released to the Australian Stock Exchange.