Inside Sigma’s FY25 results: Merger, stores and private label lift

Sigma Healthcare’s FY25 results mark a milestone for the combined entity following Chemist Warehouse Group’s reverse takeover of the wholesaler earlier this year. Sigma Healthcare’s CEO and managing director Vikesh Ramsunder and CFO Mark Davis discussed both operational momentum and strategic realignment, illustrating how the merger is reshaping Australia’s healthcare retail landscape.The company’s top-line revenue nearly doubled to $6 billion, primarily driven by the consolidation of Chemist Warehouse’s operations, while like-for-like retail network growth of 11.3 per cent highlighted the combined entity’s ongoing consumer appeal. Total retail network sales scaled to $10.3 billion, supported by 588 Australian stores and 16 international stores, including in New Zealand, Ireland and the United Arab Emirates.The merger has been instrumental in unlocking scale, widening market reach and positioning Sigma as a healthcare and retail powerhouse.Private labels and network expansionA notable contributor to Sigma’s FY25 performance was the acceleration of its own and exclusive brand strategy. The launch of 269 Wagner generics products in November last year marked one of the most strategic private-label rollouts in the pharmacy sector. Sales of own-brand and exclusive-label products increased more than 20 per cent for the year, reflecting strong consumer acceptance and high pharmacy conversion rates. Thirty-five new stores were added during FY25, consistent with the company’s decade-long growth trajectory, bringing the total franchise network to 881 stores across Australia and internationally. New Zealand has become a notable growth contributor, with retail network sales surpassing $1 billion, underscoring the transportability of the Chemist Warehouse model.For now, international expansion remains a key focus, with 77 stores across New Zealand, Ireland and Dubai and a cautious approach in China via online channels.Operational efficiencies and synergy realisationOperational scale has become a defining feature of Sigma’s post-merger success, efficiencies are being pursued, including consolidation of distribution centres with $100 million in synergies expected to be realised over four years. The company has also announced the closure of its South Guildford and Port Adelaide distribution centres, consolidating services into existing facilities to enhance efficiency. The e-pharmacy fulfilment centre in Preston, Victoria, will be closed, with online sales largely redirected through the store network by September this year. These initiatives are expected to deliver significant cost savings and operational synergies.Further expansion of own and exclusive label products is expected to deliver margin improvement. Early FY26 trading suggests double-digit like-for-like sales growth in the Australian retail network, reinforcing the positive trajectory.The post-merger period has also highlighted the importance of balancing scale with value and maintaining this balance is critical for sustaining consumer loyalty while realising profitable growth opportunities. A transformative era for SigmaRamsunder emphasised the strength of the Chemist Warehouse retail network, noting that “over the last 10 years, including international expansion, the Chemist Warehouse network has grown on average by 33 stores per year,” with retail network sales increasing an estimated 30 per cent over the same period. The company revealed that it isleveraging this scale to revitalise the Amcal and discount drug store networks, streamline its brand portfolio and expand its own and exclusive label offerings.Overall, Rasmunder reinforced a confident and integration-driven outlook.“Our first set of results of the combined business demonstrate the strength of the merger and growth opportunities that it brings,” he said. “We are now a stronger, more integrated healthcare business with enhanced scale, capabilities and long-term growth pathways.”Sigma benefits from excess capacity across its 14 Australian distribution centres, meaning it can handle higher sales volumes without a corresponding increase in operating costs, improving overall efficiency and profitabilityInternational expansion, particularly in Ireland and New Zealand, is another focus, with the Irish distribution centre providing a foundation to scale while managing supply challengesFY25 represents a transformative year for Sigma Healthcare. The merger with Chemist Warehouse has delivered significant operational scale, synergies and growth opportunities.A new, substantial target, strong financial metrics and ongoing expansion initiatives suggest that Sigma is not only capitalising on immediate merger benefits but also laying the foundation for sustainable long-term growth.As Sigma continues to integrate and refine its operations, the broader pharmacy and FMCG ecosystem will be watching closely to see how the newly expanded group shapes the market in the years ahead.