(Translation of registrant's name into English)

800 TOORAK ROAD, TOORONGA, VICTORIA, AUSTRALIA

(Address of principal executive offices)

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.

Date October 4, 2002

Coles Myer Ltd.

ABN 11 004 089 936

800 Toorak Road, Tooronga, 3146

Telephone (03) 9829 3111

Facsimile (03) 9829 6787

Postal Address: PO Box 2000, Glen Iris, 3146

News Release

Underlying retail EBIT for the Group grew by 16.2% - up by 12.4%² in the Food & Liquor business and by 36.9%³ in the General Merchandise & Apparel (GM&A) brands.

Coles Myer Chief Executive Officer John Fletcher said the result demonstrated early progress in delivering on the Group's five-year program to rebuild the business and restore shareholder value.

"Our Food & Liquor business has achieved compound double-digit earnings growth over the past 10 years," Mr Fletcher said.

"In GM&A, there has been significant and continuing earnings improvement in Target, along with a much improved second half performance by Kmart, with both brands delivering to strategy simultaneously.

"In Myer Grace Bros, the turnaround is taking longer to get traction. However, with the leadership team now in place and the recovery process underway, we believe the worst is behind us.

"We have significantly improved our cost of doing business (CODB) to sales ratio, with a reduction across the Group of 78 basis points. This represents a saving of $199 million, well ahead of our $100 million target for FY2002, increasing our competitiveness.

"We continue to forecast total CODB savings of at least $300 million by the end of FY2004.

"Ongoing benefits will emerge from the reviews of our Food & Liquor business and our head-office and support functions.

"With the arrival this month of the new leaders of our Supply Chain and IT functions, there will be further focus on running our operations faster, cheaper, better and smarter.

"The balance sheet was further strengthened over the year. This was aided by GM&A inventory levels falling by a further $107.9 million, additional to last year's reduction of $88.5 million.

"Operating cash flow rose by a substantial $445.8 million to $1.1 billion.

"This has been a challenging year for the company, but one in which we have made real progress. The full leadership team is now in place, momentum is developing and significant business transformation is taking place."

Mr Fletcher said Group sales for the first 8 weeks of FY2003 grew by 7.8%.

"While our Food & Liquor business is operating in an extremely competitive environment, we are on track in the first quarter to deliver to our strategic commitment of high single-digit sales growth," Mr Fletcher said.

"In GM&A, Target and Kmart sales continue to maintain momentum."

Directors have declared a fully franked final dividend of 12.0 cents per share.

Alan Williams, Chief Operating Officer - Food, Liquor and Logistics - said this growth reflected ongoing expansion of the food and liquor brands, including the acquisition of Franklins stores and full year contributions from Australian Liquor Group (ALG) and Leda Hotels.

"The momentum of our ex-Franklins supermarkets continues to build, with these stores generating sales of $350 million during the year. Our dual-branded strategy with Coles and Bi-Lo has assisted in attracting Franklins' customers," Mr Williams said.

"The ALG and Leda acquisitions are now fully integrated within the liquor business, with all stores re-badged to Liquorland or Vintage Cellars. While sales continue to grow in our liquor business, they are being affected by intense market competition.

"Underlying retail EBIT was up by 12.4%³ over the year, reflecting a rise in the retail margin of 6 basis points to 3.55% .

"This includes a steady improvement in the performance of the food acquisitions over the year. The ex-Franklins stores are expected to achieve F&L group margins by the end of FY2003, as previously indicated."

The F&L gross margin rose by 2 basis points to 24.29% in FY2002 and the cost of doing business to sales ratio fell by 4 basis points to 20.74%, reflecting expected EBIT margin dilution from the Franklins acquisition.

Mr Williams said work continued on the second stage of the Food & Liquor Review.

"We have identified opportunities in the business to remove duplication and improve efficiencies across the brands," Mr Williams said.

Mr Williams said the store expansion program remained on track, with a total of 51 new supermarkets opened in FY2002, including the Franklins acquisitions, as well as 29 new liquor stores and 2 hotels. Another 96 supermarkets and 78 liquor stores were refurbished during the year.

"In FY2003, we will open more than 40 additional supermarkets, mostly in the second half of the year. We will also open 40 liquor stores, boosted by the phase-out of liquor licence restrictions in Victoria. The bulk of these new stores will open in the second half of FY2003. Following the integration of the Franklins stores in FY2002, the supermarket refurbishment program will be increased to 86 stores in the coming year," Mr Williams said.

"In line with our 5 year strategy, we continue to forecast high single digit sales growth and double digit EBIT growth per annum to FY2006, with retail EBIT margins reaching 4% by FY2005.

• Underlying retail EBIT up 36.9%²
• Significant earnings improvement in Target
• Kmart delivering on new strategy
• MGB rebuild underway
• Officeworks continues to strengthen
• Substantial improvement in CODB
• Improved GM&A inventory levels and stock-turn

The General Merchandise & Apparel Group (GM&A) includes Target, Myer Grace Bros (MGB), Megamart, Kmart and Officeworks. The non-core Katies business was sold in November 2000.

Warren Flick, Chief Operating Officer - GM&A - said Target and Kmart had made promising progress in their rebuild programs while the focus continued on improving the performance of Myer Grace Bros.

"GM&A sales rose by 5.9%³ in FY2002, with customers responding positively to improving ranges and price competitiveness. The differentiated positionings at Target and Kmart are each achieving simultaneous sales success," Mr Flick said.

"Underlying retail EBIT increased by 36.9%² to $92.0 million, reflecting a substantial turnaround from the earnings decline experienced in the second half of FY2001. While gross margin fell over the year, driven largely by MGB's clearance activity and Kmart's strategic price repositioning, the increasing flow from cost savings reduced the cost of doing business ratio by a significant 207 basis points to 29.68%.

"GM&A's full team of managing directors is now in place. As our experience with Target and Kmart shows, when you combine the right leadership with the right strategy, you get results. We are confident that a similar rebuild process is underway with new leadership at MGB.

"With our tight inventory policy, we cleared winter seasonal stock as planned and total GM&A year-end inventory levels are down 6.0% on FY2001, in addition to the 4.7% reduction in the prior year. Importantly, apparel inventory levels were reduced by 7.7% in FY2002.

"Stock-turns have also improved considerably, rising from 2.9x times in FY2001 to 3.5 times in FY2002 for the GM&A group.

"Consistent with our 5 year strategic plan, we continue to expect mid-single digit sales growth per annum for the GM&A group to FY2006, and remain committed to a 4% EBIT margin target by FY2006," Mr Flick said.

Mr Flick said that Target had made a significant recovery over the year, reporting a profit of $51.7 million following a $14.6¹ million underlying retail EBIT loss in FY2001.

"Target is delivering on its strategy of offering customers on-trend, quality merchandise at very affordable prices" Mr Flick said.

"The challenge facing this brand was the need to reduce inventory levels while introducing new and more fashionable ranges. By focussing on the right positioning and operational efficiencies, it has recorded a major turnaround in the retail EBIT margin to 2.13%.

"The result was underpinned by strong performances across all apparel categories at much improved margins. This compares with aggressive mark-downs of excess stock last year."

Mr Flick said toys were another key performer, with this year's traditional winter toy sale being the most successful ever at Target. Range improvements in the home and entertainment categories have also achieved encouraging sales results.

"Target's inventory has been reduced by 11.2% and is now at an appropriate level and quality. Importantly, apparel stock-turn increased from 2.9 times in FY2001 to 3.8 times in FY2002.

"While much has been achieved over the year, we will continue to drive sales and margin growth through quickly identifying new merchandising trends, ongoing improvements to merchandise flow and stock-turn, and cost efficiencies," Mr Flick said.

Kmart and Officeworks reported a combined retail EBIT of $61.9 million in FY2002, on a sales rise of 8.4%.

"Kmart's earnings fell in the first half of the year with the introduction of a new pricing structure to regain market competitiveness, inline with its lowest price guarantee policy," Mr Flick said.

"While it was clear that the offsetting cost savings would not be realised immediately, the decision to reduce prices was made to lift market share, despite short term margin weakness.

"The second half of the year saw Kmart's performance improve significantly. Strong sales growth across apparel and hardline categories were driven by growing customer acceptance of range enhancements and more focussed marketing, underpinned by the new pricing policy.

"The quality of Kmart's sales mix also improved over the second half, with regular sales growing at more than double the rate of promotional sales in the fourth quarter. Combined with progressive cost reductions, Kmart's margins improved considerably over the period," Mr Flick said.

Officeworks delivered another impressive performance in FY2002 in a competitive market, with the network increasing from 51 to 59 stores across Australia. In line with our strategy, we expect a further 10-15 new stores to open in FY2003.

Myer Grace Bros (MGB), including Megamart, reported a retail EBIT loss of $21.6 million in FY2002, incorporating a $9.0 million write-down of computer software assets.

"MGB's performance reflects poor apparel sales during the second half of the year. This required a more aggressive promotional program to sustain sales momentum and to clear winter merchandise in season. This significantly weakened margins.

"However, inventory levels at year-end were 3.8% below last year, which has improved the position of MGB for the upcoming spring/summer fashion season.

"We remain committed to our strategic positioning and are continuing to improve our range of national and international brands, service standards and store presentation.

"We are confident that under the leadership of MGB's new Managing Director, Dawn Robertson, we are in a position to steadily rebuild the brand.

"Megamart produced another year of strong sales growth. The network has now increased to 6 stores, with the opening of a Sydney store in August 2002. Megamart is a key part of MGB's plan to expand its share of the growing furniture and electrical markets," Mr Flick said.

Mr Fletcher said e.colesmyer, in future to be known as Emerging Businesses, continued to deliver valuable learnings in the evolution of new business channels, technologies and ideas. Once these direct selling concepts are proven, they will be assimilated into the brands as appropriate. For example, following the successful development of Officeworks Direct under e.colesmyer, the business is now operating within the Officeworks brand.

Excluding Myer Direct, which was sold in January 2002, e.colesmyer sales rose by 28.3% in FY2002. Harris Technology and Coles Online were the largest contributors to sales growth.

e.colesmyer reduced its retail EBIT loss from $27.0 million to $14.8 million over the year, through increasing cost efficiencies and the sale of Myer Direct.

Harris Technology continued its strong performance, doubling profit during the year.

While the performance of the underlying businesses continue to improve, it is anticipated that costs will increase in FY2003 as financial services opportunities are further developed.

Unallocated and head office costs rose by $36.2 million to $106.5 million. As previously announced, the increase was driven by:

• Executive change costs
• Projects and consultants costs
• Higher shareholder costs, including the relaunch of the shareholder discount card
• Higher superannuation costs, following a $21 million partial holiday last year

"While some of these one-off costs will continue in FY2003, the underlying level of unallocated costs is expected to be approximately $90 million," Mr Fletcher said.

The total earnings contribution from property fell to $48.9 million from $57.4 million in FY2001. As less property was sold during the year, net gains from property disposals fell by $6.6 million to $15.0 million. Going forward, non-strategic freehold properties will continue to be sold. The book value of the property portfolio at year end was $612.1 million (FY2001: $631.1 million).

A formal process to seek expressions of interest for the possible sale of Sydney Central Plaza has also now begun. MGB would remain a tenant in the centre regardless of the outcome of the process.

Net borrowing costs decreased from $108.7m in 2001 to $75.5m, predominantly as a result of lower average net debt levels and lower interest rates. In addition, Coles Myer Ltd. received $12.4m (2001 $6.7m) in interest from the Coles Myer Employee Share Plan for the funding facility, first provided by the Company in 1994. Going forward, interest income relating to this facility is difficult to predict, as it relies on funds from the exercise of options and dividend income. However, an approximate base of $3-4 million is expected annually. Total interest income for the year was $27.4 million (2001 $16.0m).

Income tax expense of $137.2 million reflects an effective tax rate of 27.9%, in line with prior year (excluding significant items). A tax rate of around 30% is expected in FY2003.

Net debt fell by 42.5% to $702.1 million, resulting in net debt to capital employed (net debt plus equity) down to 17.5% (2001: 27.3%). Improved trading and balance sheet management were the main drivers.

A $294.0 million improvement in the net investment in inventory was driven by continued improvement in the quality of stock and higher stock turns, particularly in the GM&A businesses, along with increased supplier support. The reduction in gross inventory reflected a 6.0% fall in GM&A stock levels, while F&L inventory rose with the acquisition of ex-Franklins stores. The net result was a reduction in the Group's days stock cover from 57.0 to 52.7 days.

Working capital (basic) fell by $73.9 million to $246.5 million.

CML's credit ratings remain at investment grade quality. The long and short term ratings from Standard and Poor's are BBB+/A-2 (negative outlook) and Moody's Investors Service ratings are Baa2/P-2 (stable).

Operating cashflow rose by a strong $445.8 million to $1,118.0 million. Capital expenditure on property, plant and equipment of $578.2 million included $59.3 million for the acquisition of ex-Franklins stores. Free cashflow rose by $482.2 million to $672.6 million. As the FY2001 cash flow was inflated by a one-time sales tax refund of $208 million, the underlying improvement in FY2002 cash flow is even greater. FY2003 capital expenditure of over $800 million is expected.

Mr Fletcher said the Group's performance in the first two months of Q1 FY2003 indicated further progress against strategy, with Group sales up by 7.8%¹.

"In Food and Liquor we remain on strategy to achieve high single-digit sales growth for the year," Mr Fletcher said.

"Momentum in Target and Kmart is continuing, while at MGB the worst is behind us and the rebuild is underway.

"We expect competition in all our markets to remain intense."

Further guidance will be given at the Annual General Meeting.

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