coles myer 3q sales up 8.8%

Australia's Coles Myer 3Q Sales Up 8.8%

May 11, 2005 7:13 p.m.

MELBOURNE -- Australian retailer Coles Myer Ltd. (CML.AU) said Thursday sales rose 8.8% to A$8.7 billion in the third quarter ended April 24, compared with A$8.0 billion in the third quarter a year ago.

The company also reiterated its full-year earnings guidance of between A$670 million and A$680 million, an increase of up to 18%.

Coles Myer, which owns supermarkets and department stores, said third-quarter sales excluding its Coles Express gasoline business rose 5% to A$7.31 billion.

Some analysts were expecting third-quarter sales, excluding Coles Express, to be between A$7.27 billion and A$7.33 billion.

"This is a strong result in an intensely competitive retail market, particularly when we are cycling high prior year growth rates," Chief Executive John Fletcher said in a statement.

"The group continues to deliver against strategy and remains on track to deliver within our earnings guidance for the year," he said.

Even so, Fletcher said that the current fourth quarter is expected to continue to be "highly competitive" across all retail markets.

He noted the company will be cycling high comparative sales growth rates across the group, including 6.2% growth for food and liquor in the final quarter of fiscal 2004.

Fletcher added that sales growth from nonfood businesses will be "moderated" by tighter consumer spending, the anniversary of the federal government's family payment and the industrywide effect on winter-related merchandise sales of the unusually warm weather conditions over an extended period.

Sales from the company's key food and liquor unit rose 4.9% to A$4.77 billion in the third quarter. Same-store sales rose 3.0% in the period, it said.

Coles Express sales climbed 34% to A$1.39 billion as it benefited from rising oil prices.

The company's Kmart general merchandise chain posted a 4.1% lift in sales to A$864.6 million.

The Myer department store business reported a 3% increase in sales to A$624.6 million, while the Target chain increased sales by 6.8% to A$668.5 million.

Electrical business Megamart posted a 1.8% fall in third-quarter sales to A$61.1 million, while Officeworks increased sales by 12.5% to A$318.5 million in the quarter.