One week after their comeback to the ASX, Coles Group Limited [ASX:COL] share price today fell flat on the back of its demerger from Wesfarmers, as it plans to revitalise the brand.
At time of writing, the overall share price has fallen 3.37% and is currently sitting at $11.98.
Coles Group was relisted on the ASX on Wednesday after shareholders approved the $20 billion demerger from Wesfarmers. It is the first time Coles has traded as a standalone company since 1985.
‘It’s a great day in Coles’ 104-year history as we embark on the next chapter,’ managing director Steven Cain said.
But after a promising start (and an opening share price of $12 exceeding many analysts’ expectations), the share price fell down 2.1% overnight after Cain conceded a period of slow sales growth in the December quarter.
The overall share price has also been affected by a period of short selling.
What does the future look like for Coles?
As stated in yesterday’s announcement:
‘Cole’s strong balance sheet, attractive cash generation characteristics and market leading position in growing and resilient markets has supported strong investment grade credit ratings from leading global credit agencies.’
Despite such a resilient outlook, there are also growing concerns over flat growth and increased competition.
Analysts are banking on Woolworths coming out on top, thanks in large part to their promising growth prospects. In comparison, Coles Group will likely be concentrating on reviving itself against its competitors — including Amazon, which is reportedly undercutting both supermarket chains by selling household products reduced by up to 50%.
Hopefully, Cain will get his Christmas wish and receive a bit of ‘Santa’s secret magic’ to lift sales and help the company move forward into 2019.
Further analysis of Coles’ share price and the company’s prospects can be found here.
Editor, Markets and Money
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