Endeavour Group has announced a profit fall of 15.1% during the first half of 2025 and an early departure for Steve Donohue as CEO. Net profit for the group during the period fell to $298 million.

CEO and Managing Director Steve Donohue initially gave a 12-month notice period until September 2025, with the global search for a new CEO and Managing Director “well progressed”.

However, the start date for a new CEO will occur after Donohue’s 12-month notice period expires.

Hence, the Board has agreed that Chairman Ari Mervis will be appointed as Executive Chairman with effect from 17 March 2025, when Donohue will relinquish the position of CEO and Managing Director. Endeavour said Mervis would be in the role for a period of up to 12 months to ensure stable leadership while the appointment of the new CEO is finalised.

Mervis said: “Steve is a rare CEO who over the course of his 30 career rose from the shop floor to the top job and he leaves behind a significant legacy with Endeavour Group.

“His passion for the customer and drive are known across Endeavour as well as the broader industry, and on behalf of the Board I thank him for his commitment to the business.

“As Executive Chairman, I look forward to working with the Endeavour Team on improving the business’ performance to realise the full potential of Endeavour’s unmatched assets. I intend to accelerate further opportunities to generate growth and prioritise efficiencies and cost savings, as part of Endeavour’s strategy to simplify the business and focus on the core strategic pillars.”

The Board also confirmed the appointment of Penny Winn and Peter Hardy as Non-executive Directors, effective from 3 March 2025. Hardy was nominated by the Bruce Mathieson Group and has held senior leadership positions in ALH Hotels and Endeavour Group most recently as General Manager, Hotel Acquisitions.

Challenging conditions for Endeavour

Donohue said Endeavour Group had faced challenging macro economic conditions during the first half of FY25, reported sales of $6.6 billion, broadly in line with the corresponding period in FY24.

Retail sales fell by 1.5% to $5.5 billion reflecting subdued consumer spending in Q1 and an estimated $40 million to
$50 million in lost sales due to the Victorian supply chain disruption that reduced stock availability in stores during the
peak end-of-year trading period.

Despite this disruption, Donohue praised his team for delivering a strong trading performance in December. Dan Murphy’s achieved a record sales result for the week preceding Christmas and BWS recorded its best ever sales performance for the week preceding New Year’s Eve.

Hotel sales grew by 3.3% to $1.1 billion with sales momentum increasing throughout the half.

“Pleasingly, higher sales results were achieved across all four key business drivers – food, bars, gaming and accommodation,” Donohue said.

“Gaming remains resilient, with strong growth achieved in Queensland. Food and Bars benefited from the successful launch of the pub+ loyalty program as well as strong performance around key social occasions including Father’s Day and Christmas.

“Accommodation delivered strong growth through acquisitions and redevelopments.”

The Endeavour Group CEO said a promotional program during the key cyber sales period led its retail business to deliver its most
profitable Black Friday week ever.

“With household budgets under pressure, Dan Murphy’s Lowest Liquor Price Guarantee, expert service and
market-leading range remains a compelling offer for customers,” Donohue said.

“Our My Dan’s membership program, entering its 10th year, tailors personalised offers for its 5.5 million active members and delivered an 83% scan rate, with members spending over 80% more per basket compared to non-members.

Outlook for second half

Sales growth for the first seven weeks of H2 was -0.8% for retail, with sales in the first seven weeks continuing to be impacted by ongoing effects of supply chain disruption.

Hotel sales accelerated in Q3 and are up +4.7%.

“It’s relatively tough in retail, but customers are enjoying the pub experience, and they’re certainly spending there,” said Donohue.

“We operate in resilient categories and we expect retail market conditions to improve as inflation moderates. Our commitment to price and value leadership is expected to drive improved sales momentum in the second half.”

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