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Date : 19/04/2022

Coles Group’s (ASX: COL) stock price is rebounding, here is what you need to know!

Coles Group Ltd (ASX: COL) is an Australian publicly traded corporation that owns and operates several retail chains. The company was established in 1914 and had its headquarters in Melbourne, Australia. Coles Supermarkets, Coles Express, Liquorland, and several other businesses are part of the Coles Group.

The company’s primary businesses include selling food and groceries via its main supermarket chain Coles and the sale of liquor and gasoline through its Coles Liquor and Coles Express locations, among other things.

Currently, COL values at around $18.28 and has gained more than 3% after a week’s crash. Its stock closed at $18.18 on Thursday. The current market cap of the company is around $24.29 billion. Its trading volume is approximately 4.30 million shares.

COL: Key Financials

The stock rallied up in today’s trading session after facing a crash on Wednesday.

coles group shares quote and analysis

  1. Retailer Coles Group (ASX: COL) announced a sales revenue increase of 1% in the first half of fiscal 2022. They announced 8.6 percent sales rise in supermarkets, 18.2 percent in liquor, and 1.1 percent in Express during the last two years. A 1.6 percent increase in Supermarket sales, an increase of 2.1% for liquor, and an increase of (5.6%) percent for Express were the company’s Q2 comparable sales growth rates.
  2. High COVID-19 disruption expenses, travel constraints on Express’ revenues, and transformation project expenditures dragged down the company’s EBIT to $975 million.
  3. In the first half of the year, Coles Group Ltd reported a net profit of $549 million. The NPAT in 1H22 is 2% less than 1H2021 ($560 million).
  4. With this method, they will be able to achieve over $100 million in 1st-half benefits from Smarter Selling; they are on target to generate over $200 million in benefits in FY22
  5. Strong financial condition with $54 million in net assets and a Cash Realisation of 117 percent (excluding lease liabilities)
  6. Coles Group Ltd had a 4% decrease in TRIFR in the second half of the year compared to the same period last year.

Global and Australian Retail Industry Overview 

Coles group has an Australian Retail company and holds a significant market share in the Australian market. It is essential to know the Australian and global perspectives of the retail industry. After the Covid-19 pandemic, the global retail industry saw a sudden decline. As a result of the consequence, the Australian retail industry was also affected. The first half of 2020 saw a massive decline in the global and Australian retail industry because of the lockdown and closure of businesses due to preventive measures.

The physical stores closed due to the pandemic, giving rise to the e-commerce industry, and the businesses saw a massive spike after the first half of 2020. Australia is a flag bearer of urbanised societies globally and has around 25 million population, of which 90% reside in urban areas such as Melbourne, Sydney, Brisbane, Perth, and Adelaide. Digital advertisement, an increase in influencer marketing, and brand awareness rate have been the critical factors in the growth of the retail industry in Australia and all over the world.

According to the statistics, the Australian retail industry’s turnover in 2020 was around AUD 349 billion. Industry experts expect the retail industry to grow at a compound annual growth rate of 5.5% until 2026. Coles Group is the second-largest retailer in Australia after Woolworths. Woolworths holds a market share of 37.4%, while Coles Group’s market share is about 25%.

The global retail industry is also rising. It was valued at $20 trillion in 2020. The global retail industry is expected to grow at a compound annual growth rate of 7.7% to reach $29.4 trillion in 2030.

Why the sudden rise after a decline?

The share of COL stock declined in the market after its major shareholder and former parent company, Wesfarmers Ltd. (ASX: WES), sold its shares.

This created a sense of uncertainty among the investors about whether the former parent company and most stakeholders had lost faith in the company. According to sources, the company had sold around 28.2 million or $500 million worth of COL stock with a bit of discount as per the previous close before Wednesday. 6 April 2022.

The stock declined for a couple of days, but today at the beginning of Friday morning, its stock surged in the market. Currently, its stock values at around $18.28, gaining more than 3% from the previous close. The stock previously closed at $18.18 at the end of the last trading session, with a trading volume of around 4.30 million shares.

Conclusion

Being a significant player in the retail industry, Coles Group Ltd (ASX: COL) should focus on the broader perspective of the retail industry growth. However, Covid-19 has brought significant challenges but has brought a significant opportunity of increasing the business over the e-commerce platform. Coles Group should focus on the digital channel and reach its target audience to increase its market share in the Australian retail industry.

 

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