Retail giant Coles Myer Ltd on Friday posted a 5.5 per cent year-on-year climb in first half sales to A$13.8 billion (US$8.2bn) and reaffirmed its full-year earnings guidance of A$425 million to A$435m (US$252m-US$258m).

The Melbourne-based firm said first half sales at its discount department stores Kmart and Target continued to improve, with sales up 9.5 per cent and 8.6 per cent, respectively.

"Considering the state of these businesses only 18 months ago, this is a fantastic outcome," said CEO John Fletcher. He added sales at its loss-making Myer Grace Bros unit slipped 1.3 per cent in the six month period.