Australian retail giant Coles has delivered a surprisingly strong full-year financial result, with underlying net profit jumping 13% year-over-year, even as the company navigates lingering fallout from two high-profile regulatory and legal scandals. The supermarket chain, which was found guilty of misleading discounting practices by the Federal Court just months ago, announced its full-year results for the period ending June 28, 2026 on Tuesday, revealing a statutory net profit after tax of $1.1 billion. That figure was dragged down by a one-off $235 million provision set aside to resolve a long-running workplace underpayment dispute, which would have brought unadjusted net profit to $1.26 billion without the extraordinary charge.
The underpayment issue, which also involved Coles’ largest domestic rival Woolworths, stemmed from historic errors in industry award classification that left nearly 30,000 hourly employees underpaid across the two chains. As a consequence of the compliance failure, Coles chief executive Leah Weckert forfeited $414,000 in short-term performance bonuses, and additional $1.66 million in incentive pay was clawed back from current and former members of the company’s executive leadership team.
The second controversy hanging over the retailer stems from its well-known “Down Down” national discounting campaign, which the Federal Court ruled in May 2026 contained false and misleading representations to consumers between 2022 and 2023. The Australian Competition and Consumer Commission (ACCC), which brought the case against Coles, found the chain temporarily hiked prices of promoted products by at least 15% in the weeks before running the “Down Down” sale, with promotional prices still matching or exceeding the original pre-hike costs. The court ruling came too late in the financial year to impact the reported results, the company confirmed.
Despite the dual public scandals, Coles has gained market share in Australia’s highly competitive grocery sector, with total annual revenue hitting nearly $45.6 billion for the 2025-2026 fiscal year. Weckert attributed the strong sales growth to the company’s strategic focus on expanding its budget “everyday value” product lines and exclusive Coles-branded offerings, alongside increased engagement from its popular Flybuys customer loyalty program and rising overall customer satisfaction scores.
Weckert emphasized that the robust performance was particularly notable against a backdrop of persistent cost-of-living pressures squeezing Australian household budgets. “Despite these pressures, we strengthened our competitive position, gaining market share in supermarkets and building momentum across our digital business, and we enter FY27 with good momentum and a strong balance sheet,” she said in a statement accompanying the results. Looking ahead to the next fiscal year, Coles’ growth strategy includes opening new retail locations, rolling out its store renewal program to upgrade existing locations, and turning around underperformance in its liquor sales division.
The liquor segment continued to struggle in the most recent fiscal year, recording a 3.3% drop in annual sales to $3.55 billion. Coles also warned of a soft start to the 2026-2027 fiscal year, noting that it has lost some discretionary retail sales to rival Woolworths’ ongoing popular Disney Ooshies promotional campaign. The company will distribute a final dividend of 37 cents per share to eligible shareholders. In early trading on the Australian Securities Exchange following the results announcement, Coles shares edged down 1.3% to $22.34 in opening bell trading.