It's a big day for Coles Group Ltd (ASX: COL) shares today.
Not because shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant are racing higher. They're actually down 0.2% at $17.70, which leaves shares up 15% over the past year.
Rather, the big news for Coles shares today is that the company is hosting its annual general meeting (AGM).
Here's what the supermarket's top brass had to say.
Coles shares in the spotlight amid AGM
Coles chairman James Graham kicked off the meeting, citing "considerable progress for Coles across all strategic pillars of the business" over the financial year just past (FY 2024).
He noted that the company had achieved "improved execution both in stores and online", despite what he called a challenging external environment "marked by cost-of-living pressures on customers and rising input costs on suppliers".
Graham said that over the past five years, the price of a basket of food and non-alcoholic beverages in Australia has increased by 24%.
As for the performance of Coles shares over the five years, he said:
Coles Group's total sales revenue for the five years to June 2024 increased by 14% and our profit margin, as measured by the after tax profit as a percentage of Group sales revenue, remained essentially constant at 2.6% throughout.
And he took a swipe at the government for pointing the finger of blame for price rises at Australia's big supermarkets.
"In this context it has been disappointing to see how cost-of-living issues have been politicised and targeted at supermarket operations," Graham said.
With a nod to the legal issues that have been ensnaring Coles shares, Graham added:
Over the last twelve months Coles has participated in nine separate Federal Government, State Government, and ACCC official reviews into some aspect of supermarkets…
The matters raised by the ACCC relate to a period of significant inflation leading to a sharply increasing level of supplier cost price increases. The subsequent discounts offered to customers on these items were the result of promotional investment by the supplier and Coles which delivered a reduction in the shelf price at a time when households were under significant cost-of-living pressure.
We are very conscious of the significance of these allegations as they go to the heart of customer trust. We take compliance with Australian Consumer Law seriously and it is always our aim to ensure discounts and specials are genuine.
As previously advised, we are defending these allegations, and we will continue to keep shareholders informed.
A word from the CEO
CEO Leah Weckert then took over the podium to highlight the FY 2024 financial performance metrics that have helped drive Coles shares to a 15% gain over the past 12 months, not including dividends.
Commenting on the 5.7% year on year sales revenue growth from continuing operations (on a normalised basis), she said, "This was supported by a positive customer response to our value campaigns and the successful execution of key events including Christmas and Easter."
FY 2024 saw Coles achieve a 5.0% increase in earnings before interest, taxes, depreciation and amortisation (EBITDA) and a 5.7% increase in EBIT (on a normalised basis).
As for those pesky price increases that could throw up headwinds for Coles shares, she sounded a positive note, saying, "Pleasingly for customers, supermarkets inflation continued to moderate, with inflation across FY24 at 2.5%, a significant reduction from 6.7% in FY23".
Turning to the first quarter for FY 2025, Weckert added:
Our Q1 Supermarkets sales growth was 3.5%, while Liquor sales remained flat. Total Supermarkets price inflation remained steady at 1.5% in the first quarter and inflation excluding tobacco moderated to 1%.
