Endeavour Group’s focus on price competitiveness in its retail business has boosted sales, but eroded its bottom line.
The liquor and hotel group announced a 1.3 per cent increase in sales to $12.2 billion on Monday, but underlying earnings before interest and tax slid 8.7 per cent to $845 million.
“Sales momentum in retail is building with customers responding positively to our renewed focus on value and price leadership,” said MD and CEO Jayne Hrdlicka.
“Following the introduction of lower shelf prices in Dan Murphy’s at the end of Q1 F26, and the decision to lift our promotional competitiveness and value orientation across both Dan Murphy’s and BWS, our retail business is consistently gaining share, delivering 10 consecutive months of sales growth.”
Full-year retail sales rose by 0.7 per cent to $10 billion, with Dan Murphy’s and BWS up by 1 per cent to $9.8 billion. Comp-store growth was 0.5 per cent. This growth was offset in part by the integration of the Shorty’s business, the transition of Jimmy Brings to a Milkrun partnership model and the closure of the Prowine bottling facility.
Besides the focus on price and increasing promotional effectiveness, inflation had increased the cost of doing business across the group, contributing to the bottom-line result, she added.
Endeavour is a year into its long-term plan of reducing operational complexities, which is expected to deliver $100 million in savings in FY27 and a further $200 million by 2029. That plan includes selling off assets it no longer considers core, including some wineries and brands.
“The F26 full year result reflects a period where the group started to implement the actions required to execute its strategy and realise the potential of our portfolio of retail and hotel assets,” said Hrdlicka.
“F27 will be a year of investment for the group as we continue to execute the key initiatives required to transform all aspects of the business and establish a platform for sustainable future earnings growth.”
During the first seven weeks of the new trading year, Endeavour Group’s retail sales rose by 4.6 per cent, with transaction growth underpinning “positive comparable store sales”.
“While the group enjoyed a strong start to the year in retail, the outlook for consumer spending remains uncertain given ongoing cost of living pressure, including the impact of the continuing Middle East conflict on fuel prices, the wealth effect of a declining housing market and the potential for higher interest rates,” the group said in its ASX results filing.
This year the company plans to open eight new Dan Murphy’s stores and close a net two BWS outlets.
