Coles hits $45b in sales – but a $235m underpayment scandal cuts into profits

Coles Group released its full-year financial results today, delivering a 2.8 per cent increase in group sales revenue to $45.7 billion.

However, net profit took a hit as it rose 1 per cent to $1.09 billion after the retailer set aside approximately $235 million in provisions following a Federal Court decision on historical staff underpayments.

The supermarket side of Coles’ business achieved a 3.7 per cent growth in sales to $39.8 billion, driven largely by online grocery sales with home delivery and click and collect sales which jumped by more than 26 per cent to $5.6 billion.

Liquor sales dropped by 3.3 per cent as shoppers cut back on alcohol.

Coles increased its full-year dividend to 78 cents per share, an increase of 13 per cent year-on-year.

Woolworths Group will release its financial results on Wednesday.

While full-year earnings cover the period to late June, market watchers will also be looking for early commentary on the recent mid-2026 Disney Ooshies campaign to see how much the promotion boosted grocery spending leading into the new financial year.

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Australia’s top supermarket for 2026 revealed – and it’s not Coles or Woolies

Landmark ruling against Coles and Woolworths

Coles and Woolworths were found to have underpaid employees, leaving nearly 30,000 salaried employees underpaid by up to $1 billion combined over several years, due to systemic payroll failures.

In a landmark decision handed down on September 5, 2025, the Federal Court of Australia struck down a common retail industry practice regarding salaried store managers working 50- to 60-plus hours a week without overtime rates or penalty loadings.

The supermarkets would average or “pool out” employee pay over long periods (up to six months or a year), with Coles and Woolworths arguing that store managers fixed annual salaries were intended to cover all hours worked.

The court ruled that employers cannot pool payments across months and that an employee’s minimum entitlements under their award must be met in full for a single pay period each week or fortnight.

Coles reported that prior to the Federal Court’s judgement the company had already paid approximately $31 million in remediation directly to affected salaried managers.

The legal action against Coles centred on approximately 7800 to 8700 salaried managers, whereas Woolworths’ suit spanned over 19,000 employees. Woolworths has reportedly set aside a total pre-tax liability of up to $750 million.