(Reuters) -Australian grocer Coles Group reported a lower-than-expected annual profit on Tuesday and flagged that declining tobacco sales were slowing its top money-making Supermarkets division in the ongoing business year.
Australia implemented new smoking laws in April, mandating tobacco companies to print health warnings on the paper covering the filter of each cigarette, denting tobacco sales and spurring illegal consumption.
The country’s No. 2 supermarket chain said sales revenue at its Supermarkets division grew 4.3% to A$39.99 billion on a normalised basis in the year ended June 29, with a growth of 5.7% excluding tobacco.
The momentum has continued in the first eight weeks of the current business year, as sales revenue grew 4.9%, and by 7% when excluding tobacco.
Rising financing costs alongside higher lease and wage expenses further squeezed Coles’ bottom line for the year.
Net profit after tax attributable to shareholders came in at A$1.08 billion ($701.78 million), down from A$1.12 billion last year and below the Visible Alpha consensus estimate of A$1.11 billion.
The more than 100-year-old Melbourne-based retailer declared a final dividend of 32 Australian cents per share, the same as what it paid last year.
($1 = 1.5389 Australian dollars)
(Reporting by Sameer Manekar and Shivangi Lahiri in Bengaluru; Editing by Vijay Kishore)
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