Brokers spot early gains at Woolies ahead of Coles' update

Coles

29/10/2025 19:56

** Analysts at Morningstar note while Woolworths' WOW.AX supermarkets are still underperforming rival Coles' COL.AX, initial signs are positive

** WOW, Australia's top retailer, beat Q1 sales estimates on deeper discounts, lower pricing and focus on e-commerce

** Morningstar flags Australia food sales momentum improved in October for WOW but expects it to take most of FY26 for WOW to close the sales growth gap to COL

** Adds WOW shares remain undervalued and markets expect COL to hold on to its operational outperformance for longer than itself; COL to report later in the day

** Believes restoring customer price trust will take some time, weighing on sales performance for most of FY26

** Analysts at Jefferies show hesitancy to back WOW's Q2 sales update as it was unclear whether growth was driven by relative improvement or rather market factors

** Adds WOW's management has invested in value and inventory to address competition and availability; flags too early to definitely say situation is improving

** WOW stock down 9.5% YTD

 (Reporting by Rishav Chatterjee in Bengaluru)

 ((Rishav.Chatterjee@thomsonreuters.com))