Metcash tobacco sales jump 11.7%

• Metcash reported an 11.7% jump in tobacco sales for the first 18 weeks of the financial year.
• Group sales grew 2.6%, beating analyst expectations of 2.4% growth.
• Growth was driven by strong tool and hardware performance despite flat liquor demand.

Metcash (ASX:MTS) reported an 11.7% growth in tobacco sales across its independent store network during the first 18 weeks of the financial year.

The overall group revenue rose 2.6%, which exceeded average analyst projections of 2.4% growth for the period.

“While trading conditions are expected to remain challenging, Metcash enters the new year in a position of strength,” said Metcash Chairman Peter Birtles.

The wholesale supplier stated that it recovered $65 million of earnings previously lost to illicit black market trade since 2021.

Following the announcement, the Metcash share price was down at $2.94.

Supermarket sales growth excluding tobacco accelerated from 1.2% in the first seven weeks to 3.5% over the following 11 weeks.

Tools and hardware sales expanded by 6%, while liquor sales remained subdued at 0.8% growth due to heavy competitor discounting.