Coles Group booked a $235 million charge for underpaying its own store managers in the full year results it lodged on Tuesday, and reported underlying profit of $1.26 billion, up 13.7 per cent.
The charge cost $165 million after tax. It pulled statutory profit, the figure that includes it, back to about $1.1 billion, a rise of 1 per cent. Coles recognised the amount after the Federal Court delivered judgment on 5 September 2025 in proceedings brought by the Fair Work Ombudsman over the pay of salaried supermarket managers.
Shareholders were paid more. The board declared a fully franked final dividend of 37 cents a share, taking the FY26 total to 78 cents, up 13.0 per cent on the previous year.
Group sales revenue was $45.58 billion, up 2.8 per cent. Group earnings before interest and tax, excluding the underpayment charge and other significant items, came in at $2.32 billion, up 9.9 per cent.
The supermarkets business did the work. Sales there rose 3.7 per cent and earnings rose 12.2 per cent, with the division's margin widening 43 basis points to 5.7 per cent. A margin move of that size means Coles retained a larger share of every dollar spent at its checkouts than it did a year earlier.
Chief executive Leah Weckert said FY26 was "another year of consistently strong performance for Coles, with above-market sales and strong earnings growth accompanied by further improvements in customer NPS and team member engagement". She said the company was investing in "an accelerated store opening and renewal program".
The Fair Work Ombudsman began its proceedings in December 2021. The case turned on whether the annualised salaries Coles paid its store managers covered what those managers were owed under the General Retail Industry Award in each pay period. The Federal Court found the arrangements could not be used to set off award entitlements across pay periods, which is what produced the liability now sitting in the accounts. The regulator's case covered salaried managers employed in Coles supermarkets between 2017 and 2020.
Liquor went the other way. Sales fell 3.3 per cent and divisional earnings fell 47.8 per cent to $59 million. Coles will close 30 liquor stores in FY27.
Supermarkets eCommerce sales reached $5.6 billion, up 26.4 per cent.
The 13.7 per cent growth headline is the underlying number, and underlying excludes the charge for the underpayments. The statutory number, which carries it, rose 1 per cent.
