Endeavour Group has provided a trading update for H2 FY26 to date, together with details of its three-year cost reduction program to deliver $100 million of savings in FY27.

Group sales reached $2.93 billion in the third quarter, up 3% on the previous corresponding period. However, sales slowed significantly in March, with the Middle East conflict leading to a drop in consumer sentiment. H2 FY26 sales growth was 0.7% for retail and 3.7% for hotels (as at week 43).

Endeavour Group CEO Jayne Hrdlicka said: “The strength of the Dan Murphy’s and BWS brands and our ability to capture demand around celebration occasions were again evident in our retail trading results over the Easter holiday period.

“Despite challenging macroeconomic conditions and geopolitical uncertainty impacting consumer sentiment, our retail business has maintained positive sales growth. Our continued market share gains in retail underscore our compelling value proposition in both Dan Murphy’s and BWS, which continue to resonate with customers.”

Staff reduction for head office

To achieve the group’s target of $100 million in cost savings it will focus on initiatives such as store cost optimisation, labour efficiencies, centralised administration, procurement savings and support office headcount reduction.

“In line with our strategic focus on simplifying the Group platform, we have identified a significant opportunity to drive costs out of the business and improve productivity and profitability,” Hrdlicka said.

“We are implementing a more efficient operating model to deliver better returns for our shareholders and look forward
to discussing this more fully at our upcoming Investor Day.”

Record Anzac Day hotel sales

Following a strong start to Q3 trading, sales momentum in hotels began to soften in March. Sales growth moderated
across all drivers – food, bar, gaming, and accommodation. Notwithstanding, the group celebrated a record trading result on ANZAC Day.

Sales growth across March and April (as at week 43) was 1.5% versus the previous corresponding period. In response to growing cost of living pressures, hotels teams have adapted guest offerings to drive footfall and deliver greater value. Key initiatives include the launch of a winter menu anchored around great value items, enhancements to member exclusive loyalty offers and targeted local area promotions including fuel card giveaways.

“We remain confident in the defensive revenue characteristics of the hotels business which has a track record of
strong cashflow generation supported by through-the-cycle consumer demand,” Hrdlicka said.

“Furthermore, our unique portfolio of hotel and retail businesses provides a natural hedge to any shifts in consumer spending between off-premise and on-premise.”

.This is part of the Group’s strategic focus and details of the broader strategy will be forthcoming at its
Investor Day on 27 May 2026.

Managing business impacts of Middle East conflict

Endeavour Group said it is actively working to manage the impact of the conflict in the Middle East by taking steps to minimise the risk of supply disruption, mitigate elevated fuel and freight costs and undertake downside case scenario planning to ensure maximum commercial resilience and appropriate inflation management.

To create a buffer against potential supply chain constraints, the Group is proactively increasing inventory cover for key fast moving products. It anticipates reaching a maximum $400 million of additional inventory compared to prior year. However, it said higher inventory levels will temporarily impact Group leverage due to the increase in working capital, which will be funded through incremental short-term debt facilities.

Endeavour Group said it is experiencing pricing pressure throughout its supply chain due to increased fuel costs linked to
the Middle East conflict. It is working with its suppliers to manage these pressures to mitigate structural cost inflation and to minimise the impact on customers.

The Group estimates that it will incur additional fuel and freight related costs in FY26 of between $6 million and $8 million, which will primarily be reflected in retail gross margin.

Endeavour Group will provide a further update on the impact of the Middle East conflict on its business at its full year results
presentation in August 2026.