Endeavour Group has announced its half-year FY26 results, with revenue up 0.9 per cent to $6.7 billion but net profit falling to $247 million, down more than 17% year-on-year.

The drinks giant also confirmed it has shelved plans to sell off its hotels portfolio, as retaining retail and hotels “represents the best opportunity to realise value for shareholders”.

Retail sales increased by 0.2% to $5.5 billion during the period, with sales momentum improving in the second quarter. Sales for Dan Murphy’s and BWS increased by 0.7% to $5.4 billion during the period.

Endeavour Group said that since the start of September, Dan Murphy’s and BWS together have delivered four consecutive months of sales growth, “reflecting the Group’s commitment to price leadership as a fundamental part of the customer experience, particularly in Dan Murphy’s”.

Second quarter combined sales for Dan Murphy’s and BWS grew by 2.2% (or 0.6% adjusting for the estimated $45 million sales impact of supply chain disruption in the previous corresponding period).

Endeavour Group highlighted that the period included the strongest ever sales month in December, driven by Dan Murphy’s record trading weeks leading into both Christmas and New Year’s Eve, with Christmas Eve setting a new daily sales record.

Online sales increased to 11.3% of combined Dan Murphy’s and BWS sales, which Endeavour Group said reflected “both a highly competitive promotional environment and the Group’s sharpened focus on price leadership”.

Online sales grew by 35.1% to $608 million with the ultra-convenience channel delivering the strongest growth.

Underlying cost of doing business (CODB) remained flat compared to the first half of FY25, reflecting “ongoing cost optimisation which mitigated elevated inflation”. Retail delivered Underlying EBIT of $327 million.

The result included a $40 million provision related to the exit of a supply chain services deal with Woolworths for warehousing at its Melbourne liquor distribution centre. 

During the period hotel sales increased by 4.4% to $1.2 billion. Sales growth in the second quarter was driven by “an uplift in gaming, strong results from refurbished venues and positive trends in food and bar transactions”.

Endeavour Group noted that the hotels division delivered its strongest monthly sales result ever in December, supported by record sales in the week leading up to Christmas as well as record sales for food, bar and accommodation on New Year’s Eve.

Hotels delivered Underlying EBIT of $275 million.

Managing Director and CEO Jayne Hrdlicka said: “We are pleased to report that the Group has delivered a first half earnings result that demonstrates the strength in our customer franchise as we restart top line growth in retail.

“In a challenging market, our increased focus on value and price leadership has been embraced by our customers and is delivering both sales growth and market share gains.

“Our hotels business continues to improve its performance, supported by positive trends in food and bar transactions and growth in gaming revenue driven by targeted investment in refurbishments and new EGMs.

“Looking forward, we are excited about the next phase for Endeavour as we complete our strategy work and begin the process of getting early opportunities ready for implementation. We will share this work with the market at our
Investor Day when the detail around the plan is more complete.

“The Group has a unique asset portfolio, a large and loyal customer base and some of Australia’s most trusted retail brands. We also have a talented team, including our new executive leadership group, who are energised about our future and hungry to deliver the significant change agenda we have in front of us.

“Of most importance, our passion for delivering great experiences for our customers and guests is now firmly guided by strong, data-led insights on what customers need each of our brands to deliver. I am confident that we now have the management team and right strategy to leverage our scale and market leadership, compete to win and unlock value for our shareholders.”

An interim dividend of 10.8¢ per share will be paid on April 15, down 13.6 per cent on the prior year and lower than market expectations.

Jefferies analyst Michael Simotas said in a note to clients: “Progress has been made, but not enough to suggest a Woolworths-style turnaround yet. Expect consensus downgrades and the stock to underperform.”

Outlook for the second half

Endeavour Group said sales growth for the first seven weeks of the second half of FY26 was up 1.3% for retail and up 4.5% for hotels.

The Group noted that the “retail is continuing to gain share in a competitive liquor market”. However, sales growth in both retail and hotels moderated in February compared to January.

“The outlook for consumer spending remains uncertain given elevated inflation and rising interest rates,” Endeavour Group concluded in its announcement to the ASX.

“The Group’s scale, value proposition and market leading brands mean we are well positioned to compete and win in a
market where consumers remain focused on value for money.”