Sectors: Consumer Staples
COL +4.9%: headline FY26 profit was a touch light, but the core supermarkets business remains in good shape, with EBIT up 12%, margins benefiting from productivity initiatives and early FY27 sales maintaining the 4Q run-rate. Liquor remains the obvious problem child, while a sizeable step-up in FY27 investment will keep some pressure on cash flow, leaving us with a result that was sound rather than spectacular.
Supermarket giant Coles came under pressure on two fronts yesterday, ultimately falling by -4.2%. We actually thought the market was kind to COL, almost halving its losses in afternoon trade following two very different pieces of news.
Australia’s largest supermarket operator is up +38% so far this year as it recovers strongly from the uncertainty around the price-fixing investigation by the ACCC. The company’s actually had a mixed year operationally at a glance, firstly delivering a strong earnings beat in February only to deliver a mild profit warning in April due to rising costs and increased customer caution.
MTS -1.89%: Released their FY26 result this morning that was broadly in line with expectations & show earnings have stabilised, even if growth remains hard to come by. The group delivered underlying profit of $268.8m, inline with consensus, while sales were broadly flat at $17.35bn.
MTS +6.57%: has been a frustrating holding in the Income Portfolio recently, with the stock weak into today’s update as investors worried about softer hardware conditions, margin pressure, freight costs and broader consumer weakness.
EDV –3.8%: dropped after a softer 3Q update, with sales growth showing signs of slowing as cost-of-living pressures begin to impact consumer spending.
WOW -7.78%: sold off sharply after the supermarket giant warned Australian Food EBIT growth will fall short of the upper end of its FY26 guidance, implying softer second-half earnings momentum. The downgrade weighed on the sector, with peers Coles and Metcash also trading lower.
The consumer staples sector is becoming more interesting as higher energy prices begin to feed through the economy, though this will take some time. Fuel moves first, but the broader impact on food, packaging, freight and household budgets tends to come through with a lag.
Woolworths is one of the most data-rich businesses in Australia, and that’s precisely where its AI opportunity begins. With over 20 million active Everyday Rewards members, the company sits on one of the largest consumer datasets in the country and holds purchase history, frequency, basket composition, and price sensitivity insights across millions of households.
