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Coles Myer posts record sales
SYDNEY, Australia (CNN) -- Coles Myer has confirmed its status as Australia's biggest retailer, pushing full-year revenue 6 percent higher to a record Aust. $27.017 billion ($17.8 billion). That eclipses the record A$26.3 billion in annual sales posted last month by arch-rival Woolworths, which gets 85 percent of its revenue from supermarkets. Coles Myer CEO John Fletcher said Thursday the group had the right team and right strategy to deliver results. Coles now expects to post underlying net profit for the year of about A$445 million. That is above an earlier target range of A$425 million to A$435 million, but below Woolworths' expected A$600 million-plus when it reports on August 25. (Full story) The record sales result for Coles pushed its shares higher on the Australian Stock Exchange Thursday. They are up 2.6 percent to A$7.44 in afternoon trade, while Woolworths are down 0.4 percent to A$11.79. The broader market, measured by the S&P/ASX200, is flat. Coles and Woolworths are locked in a long-running battle for control of Australian consumer spending. Both run supermarkets, liquor outlets and general merchandise stores, with Coles also having the Myer and Grace Bros department stores. Offering discount petrol to shoppers has been a key part of the battle, with Woolworths getting a handy head start from the 287 sites it already operates, 210 of which are in its carparks or next to a Woolworths store. Woolworths said last month its fuel sales rose 56 percent to A$1.71 billion in the year to June 29. Coles began its own discount offer last month after striking an alliance with global oil company Shell that will cover 584 outlets across Australia by June 2004. It hopes fuel sales will add A$3 billion to revenue in 2004. The fuel offer is part of Fletcher's turnaround strategy for Coles, following a bruising boardroom battle in 2002 that saw a key shareholder, Solomon Lew, voted off the board in November. Lew had been highly critical of the performance of Coles, particularly its Myer, Grace Bros and Target stores. Coles said Thursday that after three quarters of negative growth, combined sales for Myer Grace Bros and Megamart in the fourth quarter rose 5.1 percent to deliver a flat full-year result, down 0.1 percent. Sales at Target stores rose 9.3 percent for the year.
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