3 days, 3 supermarkets: the reporting week that will shape ASX consumer staples shares
The final week of August will be a big one for ASX consumer staples shares.
Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES) are all scheduled to report on consecutive days.
Their combined consensus net profit runs to more than $5.6 billion.
As a result, these three companies are a great barometer of Australian consumer behaviour on the calendar.
Why this week matters for ASX consumer staples shares
Households have spent two years absorbing cost-of-living pressures.
This year they absorbed something else as well. The RBA lifted the cash rate three times before pausing, taking it to 4.35%.
Rate rises take time to work through household budgets.
The FY26 results will be the first full-year window into how that tightening has changed what Australians end up putting in the trolley.
One technical note is worth making here. Wesfarmers is not classified as a consumer staples business, since Bunnings and Kmart sit in the discretionary bucket.
I have included Wesfarmers because it is a great indication of Australian household spending habits.
What recent earnings set the bar at
February's half-year results gave us the hurdle each company must clear.
Woolworths delivered the best results of the three.
Group EBIT rose 14.4%, and the board declared a fully franked interim dividend of 45 cents, up 15.4%.
Coles was more mixed.
Sales revenue lifted 2.5% to $23.6 billion, and group EBIT excluding significant items rose 10.2% to $1,231 million.
Supermarkets EBIT grew a strong 14.6%.
But statutory net profit fell 11.3% to $511 million, hit by a $235 million provision relating to the Fair Work Ombudsman proceedings.
The interim dividend still rose 10.8% to 41 cents, fully franked.
Wesfarmers grew revenue 3.1% to $24.2 billion and net profit 9.3% to $1,603 million.
Its interim dividend rose 7.4% to $1.02 per share, fully franked.
All three lifted their payouts, which tells you something about how confident these boards were halfway through the year.
The numbers these ASX consumer staples shares must beat
Share prices on results day are driven by the gap between reported profit and consensus, not by the size of the profit itself. A record result that misses expectations will often trade lower.
Margins are where I would focus.
Coles reported supermarket price inflation of 1.9% in the second quarter, or 1.7% excluding tobacco.
Low inflation is welcome for shoppers. However, it also removes an easy lever for revenue growth, which places all the pressure on volumes and cost control.
Investors should watch the gross margin lines closely.
A supermarket growing sales through promotional activity is not the same business as one growing through genuine volume.
Foolish takeaway
Three results across three days will produce a lot of noise.
The questions that matter for ASX consumer staples shares are the following.
Are volumes growing without discounting? Are margins holding as inflation fades? And is management confident enough about FY27 to say so plainly?
The post 3 days, 3 supermarkets: the reporting week that will shape ASX consumer staples shares appeared first on The Motley Fool Australia.
Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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