Endeavour Group has announced its FY26 results, which show retail sales gained momentum. Combined sales growth for Dan Murphy’s and BWS rose from 0.7% in H1 to 1.4% in H2.

While the Group enjoyed a strong start to the year in retail, it said the outlook for consumer spending remained 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.

Group sales rose 1.3% to $12.2 billion, however Group underlying EBIT fell by 8.7% to $845 million, with Group net expenses of $372 million reducing Group statutory NPAT to $52 million.

CEO Jayne Hrdlicka said better returns for investors should begin to flow from 2028, but in the meantime the Group would need to spend $130- $160 million on refurbishing hotels to drive growth.

As many as 75 of Endeavour Group’s 351 pubs will be refurbished, with disruption to trading from renewal activity expected to adversely impact hotel earnings in FY27

“The fiscal 2026 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,” Hrdlicka said.

“Fiscal 2027 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.”

Hrdlicka told The Australian: “The most important thing for us is that we are very focused on delivering shareholder returns as fast as we possibly can, and the business has been underinvested in for a number of years, both in retail and in hotels.

“We have got a job to do and we are focused on going to do that.”

Hotels delivered sales growth of 4.4% in H1 and 3.9% in H2. Endeavour Group said sales growth in Q3 moderated to 3.7% as growing cost-of-living pressure, including fuel price increases, impacted consumer spending. Sales growth in Q4 improved to 4.2% (or 3.9% adjusted for the estimated uplift in sales from the FIFA World Cup).

Aside from the FIFA World Cup boost, Hrdlicka said hotel patrons were generally spending less during each visit.

FY26 retail sales increased by 0.7% to $10 billion, with sales for Dan Murphy’s and BWS increasing by 1% to $9.8 billion, with comparable store sales growth of 0.5%.

Endeavour Group said retail sales steadily improved during the year as customers responded positively to value and price leadership. This included Dan Murphy’s and BWS stores entering into a price war with Coles when it offered discounts of 20% during the period, which Endeavour Group matched due to its price-beat guarantee.

Online sales grew by 34.8% to $1.1 billion, representing 11.6% of combined Dan Murphy’s and BWS sales.