The group, which has more than 850 shops across the country, is due to report its earnings for the first half of 2025/26 on Friday.
According to a consensus of market forecasts, Coles is again expected to produce a bumper net profit of between $689 and $709 million, well above the $576 million result for the previous corresponding period.
Its underlying earnings could come in about $2.2 billion, above 2024/25's $2 billion half-year result.
Early signs pointed to solid sales, but the strength of the results would hinge on whether margins had improved, eToro market analyst Josh Gilbert told AAP.
Investors wanted to see benefits flowing through from automated distribution centres and growth in high-margin areas such as e-commerce, he said.
"If we can start to see that coming through on the bottom line, that's what we're really looking for," Mr Gilbert said.
Coles has spent the week defending Australian Competition and Consumer Commission claims it misled customers with fake discounts on thousands of products.
The retail giant inflated prices before lowering them to above their original levels under its "down down" campaign, launched in 2021, the consumer watchdog alleged.
Coles maintained the discounts were genuine during the week-long trial.
It remained to be seen whether the controversy would affect where customers shopped, Mr Gilbert said.
Woolworths could face similar headwinds as the consumer watchdog prepares to launch proceedings against the nation's other big chain from April.
The group's stronger-than-expected half-yearly results released on Wednesday have put additional pressure on Coles to maintain its seven-quarter strong growth lead.
Excluding one-off costs, Woolworths posted a net profit of $859 million for the period, up 16 per cent.
Shares in the country's largest supermarket giant surged 13 per cent on Wednesday following the release of the results - its biggest single-day gain on record.
Mr Gilbert said Woolworths' results were not the "smoking gun" showing it was closing ground on Coles, but suggested its promotional spend was paying off.
"They've gone back to winning back customers," he said.
"Ultimately, they're coming back and, more importantly, they're shopping more frequently across the channels."
While feedback suggests Woolworths is gaining market share, Macquarie analysts believe Coles remains the preferred option for investors.
"We are attracted to a stronger margin and earnings outlook for (Coles), with ongoing benefits via scaling of supply chain assets," a research note shared with AAP said.
Given the strength of Woolworths' results, anything less than a strong performance for Coles would have share price consequences, Mr Gilbert said.
"Woolworths have really put them under pressure," he said.
"If Coles' performance is just standard or in-line, I think we'll see shares trade lower."
