The Coles Group Ltd (ASX: COL) share price is back where it started this month.
Despite a strong start to August, shares in the supermarket giant have slumped more than 5% since the start of this week.
Let's take a look at what's been moving the Coles share price.
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Why is the Coles share price sinking?
There have been several catalysts that have attributed to a weaker Coles share price this week.
Most recently, the supermarket giant announced a restructuring of its refinancing package.
Coles announced that it had refinanced $1.3 billion of bank-financed debt into a 4-year Sustainability Linked Loan (SLL).
Under the new arrangement, the company's debt will be linked to three sustainability targets.
These targets include reducing CO2 emissions, increasing the proportion of women in leadership roles and reduce waste sent to landfills.
According to Coles, the new arrangement is in line with the company's ambition of becoming Australia's most sustainable supermarket chain.
In addition, a strong full-year result from archrival Woolworths Group Ltd (ASX: WOW) also proved a dampener for the Coles share price.
Coles has also been on the receiving end of some unfavourable broker coverage.
According to a recent note from UBS, analysts retained a sell rating on the retailer.
The broker noted that, despite delivering full-year results in line with expectations, Coles may struggle to gain market share in the future.
How did Coles perform in FY21?
Despite a sell-off this week, the Coles share price received a boost last week after reporting a solid full-year result.
Highlights from the company's FY21 report included;
- Sales revenue increased 3.1% to $38,562 million.
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 5.4% to $3,432 million.
- Net profit after tax up 7.5% to $1,005 million (compared to consensus estimates of $998.2 million).
- Fully franked final dividend of 28 cents per share. Resulting in a record total dividend of 61 cents per share, up 6.1% from FY20.
Snapshot of the Coles share price
Overall, the Coles share price has underperformed the broader market in 2021.
Shares in the retailer are down around 2% since the start of the year.
In comparison, the broader S&P/ASX200 Index (ASX: XJO) has risen more than 13% since the start of 2021.
