Coles Q3 sales up, fuel deal on its way 15/05/03 By: Andre Khoury
Coles Myer Ltd (CML) chief executive officer John Fletcher today said the company expects its net profit for full year 2003 to be at the “upper end” of the $425 million-$435 million earnings guidance previously announced. This came after posting third quarter sales of $6.5 billion, an increase of 5.9% for the 13 weeks ended 27 April, 2003, and in line with market expectations.
“This result demonstrates good progress against our strategy in a highly competitive environment,” Mr Fletcher said.
Food & Liquor sales increased by 4.2% over the third quarter, up from 3.4% in the previous quarter. Kmart and Officeworks combined sales rose by 16.7% while Target sales were up by 13.4%. However sales were down by 3.1% in Myer Grace Bros.
“The result reflects a relentless focus on our customers- providing the best service, the best ranges and the best prices every day,” Mr Fletcher said.
Chief operating officer, Food and Liquor, Alan Williams, said Coles, Bi-Lo and Liquorland were competing aggressively in all their markets.
“At the same time we are continuing to work on a range of new initiatives to deliver ongoing benefits- an improved fresh offer, new advertising campaigns for Coles and Bi-Lo and improvements to our check out and service standards,” Mr Williams said.
He said the supermarket store expansion program “is continuing”, with seven new stores opening during the third quarter. A total of 45 openings are expected for full year 2003.
Mr Williams said food sales continued to be impacted by fuel discounts in the market. On Coles’ long awaited fuel discount offer with Shell, Mr Williams said: “We are making excellent progress in finalising a fuel offer for our customers, thereby eliminating a significant point of difference with our major competitor.”
Mr Williams added that the company expects mid single digit sales growth for the Food & Liquor business for the full financial year.
Sales growth at Kmart & Officeworks “was boosted by a full quarter contribution from Viking,” Kmart managing director Hani Zayadi said.
“Kmart sales growth is expected to moderate in the fourth quarter, however, given the high prior year sales base. We continue to expect a lower earnings contribution in the second half of the year, in line with normal industry seasonal trends,” Mr Zayadi added.
Target managing director Larry Davis also highlighted the point that sales growth is expected to slow in the fourth quarter.
Myer Grace Bros (MGB) managing director Dawn Robertson said the combined decrease in sales for MGB and Megamart “reflects a significant reduction in unprofitable discount and promotional activities over the same period last year.
“While this strategy resulted in lower sales volumes during the period, the quality of sales, and therefore margins, improved considerably,” Ms Robertson said.
above from egoli.com.au
i reckon the result is probably a bit disappointing and the main driver of the hare price in the short term ill be the announcement if any with shell or some petrol
people may carry on that the recent tax cuts are not much but these are they same people that go and drive up to 5kms to save 4 cents a litre on unleaded
see my previous posts on what i think how important just a petrol/fuel relationship between cml and either shell or bhp to cml's bottom line given the upcomming onslaught from aldi and trying to keep pace ith wow
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