Endeavour Group delivered $2,728 million in total sales in Q3 FY22, 2.1% lower than the same quarter last year. The fall has been attributed to the timing of Easter, bad weather and COVID-19.

Easter fell in the third quarter of last financial year compared to the fourth quarter this year. Excluding the impact of Easter in Q3 F21, Endeavour said group sales in Q3 FY22 would have been broadly in line (0.3% lower) with the elevated trading levels in Q3 F21.

Endeavour Group Managing Director and CEO, Steve Donohue, said “These results are once again delivered within the context of an uncertain operating environment with extreme weather events, ongoing supply chain disruptions and growing inflationary pressures creating new challenges.

“COVID-19 continued to impact our operations. This was particularly evident at the beginning of the quarter, when consumer hesitancy reduced patronage in our hotels, while team availability was a challenge in both businesses.

“Operating conditions were further impacted by recent floods and adverse weather across parts of NSW and Queensland. Team members from multiple sites have been personally impacted by the severe flooding and we are offering them additional support including financial assistance for property damage, providing vouchers for food and offering accommodation for displaced team members and their families at our hotels.

“Together with our customers, we have also raised over $800,000 to help communities impacted by the floods via charities including donation platform GIVIT.org.au and Red Cross.

“The flood events caused extensive damage to a small number of our stores and hotels in the quarter. Our Dan Murphy’s Lismore store was submerged in the flooding in the first week of March. In addition, 10 of our BWS stores as well as the Breakfast Creek Hotel (Brisbane) and Westower Tavern (Ballina) were significantly impacted. As a Group, we have suffered approximately $9 million in damages in Q3 which reduced EBIT for the period. This includes direct costs as a result of the floods, such as clean up costs and asset write-offs, as well as an estimate of lost profits when stores and hotels were not able to
operate.

“We are working through the insurance claim process and have not recognised an insurance recovery to date. We reopened the majority of our impacted sites by April, but five stores and one hotel remained fully or partially closed as at the end of Q3.”

Retail sales declined by 0.7% (Easter-adjusted) reflecting the shift of customers returning to on-premise venues as COVID-19 restrictions began to ease. Online sales increased by 16.8% (Easter-adjusted) in Q3 F22 to $222 million, equivalent to 9.6% of Retail sales.

The company noted it has reached annualised online sales of more than $1billion.

“We continue to see online sales growth, supported by our continued investments in digital platforms and engagement, such as the BWS Cooler campaign and Dan Murphy’s personalisation capability,” the company noted.

Its loyalty programs also continue to boom. More than 30% of Australia’s adult population is a member of the Dan Murphy’s loyalty program, which has 6.2 million people on board. Of the 6.2 million-plus My Dan’s members, about 3.9 million have “shopped and scanned” using their membership in the past six months. 

Endeavour said hotels trading momentum continued to improve, largely as a result of easing COVID-19 restrictions in NSW and Victoria which offset a decline in Western Australia where restrictions tightened. The business delivered $405 million total sales in Q3, up 3.8% on the prior year. Unlike retail, hotels’ sales growth was favourably impacted by the timing of Easter due to licence restrictions on Good Friday trading, which fell in the third quarter last year. Adjusted for the timing of Easter, Hotels’ sales growth for the third quarter was 2.5%.

During the quarter, eight hotels were renewed and two were acquired – The Empire Hotel and The Grand Tasman Hotel, both in South Australia – bringing the total hotels to 344 (including five managed clubs) at the end of the quarter.