Morgan Stanley sees top-line growth drag for Aussie consumers from tepid tobacco sales

Coles

28/07/2025 03:39

** Analysts at Morgan Stanley say acceleration of tobacco sales declines and continues to drag on top-line growth for supermarkets

** Brokerage, however, estimates drag to top-line growth to remain broadly consistent at 100 basis points in FY25-26

** Analysts at brokerage say trends reflect rise in vaping and e-cigarettes

** Valuation support and slower-than-expected consumer recovery see us continue to favour consumer staples over consumer discretionary; with preference for Woolworths WOW.AX & Coles COL.AX - Morgan Stanley

** Brokerage rates both firms as "overweight"

** Shares of Coles currently up 0.3%, Woolworths up 0.1%

** Consumer staples sub-index .AXSJ up 0.1%, compared with a 0.5% rise in consumer discretionary .AXDJ

 (Reporting by Shivangi Lahiri in Bengaluru)

 ((shivangi.lahiri@thomsonreuters.com))