Endeavour Group has flagged up to $8 million in additional supply chain costs in the second half of FY26 and a $400 million inventory build as it responds to disruption from the Middle East conflict, while also announcing a $100 million cost reduction target for FY27.
The ASX-listed operator of Dan Murphy’s and BWS liquor retail chains, and a portfolio of hotels, posted Q3 FY26 sales of $2.93 billion, up 3.0 per cent on the prior corresponding period, with Retail rising 2.9 per cent to $2.40 billion and Hotels up 3.7 per cent to $531 million.
On a half-to-date basis (16 weeks to 26 April 2026), Retail growth slowed to 0.7 per cent, reflecting softer consumer demand outside of the Easter trading period, while Hotels maintained 3.7 per cent growth.
Sales snapshot – H2 FY26 to date
|
$m |
Q3 F26 |
Q3 F25 |
Q3 change |
H2 HTD change |
|
Retail |
2,398 |
2,331 |
2.9% |
0.7% |
|
Hotels |
531 |
512 |
3.7% |
3.7% |
|
Total Group |
2,929 |
2,843 |
3.0% |
1.2% |
The Easter period boosted Retail results, with the group noting significant promotional activity across the sector during the holiday. Endeavour Group CEO, Jayne Hrdlicka, said the performance of Dan Murphy’s and BWS in capturing event-driven demand remained a key competitive strength.
“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,” Hrdlicka said.
“Despite challenging macroeconomic conditions and geopolitical uncertainty impacting consumer sentiment, our Retail business has maintained positive sales growth.”
Hotels slowdown
Hotels sales momentum softened through March and April, with growth across food, bar, gaming, and accommodation all moderating. Sales growth across March and April (to Week 43) came in at 1.5 per cent versus the prior corresponding period, despite a record result on ANZAC Day.
The group said hotels teams have responded by adapting guest offerings, including launching a winter menu focused on value, enhancing member loyalty offers, and running local area promotions.
Hrdlicka said the hotels portfolio’s defensive revenue characteristics provided resilience through the cycle.
“Our unique portfolio of Hotel and Retail businesses provides a natural hedge to any shifts in consumer spending between off-premise and on-premise,” she said.
Supply chain pressure
Endeavour is proactively increasing inventory cover for fast-moving products in response to the Middle East conflict, anticipating a maximum $400 million of additional inventory versus the prior year. The higher stock levels will be funded through short-term debt facilities and are expected to temporarily affect group leverage.
Elevated fuel and freight costs flowing from the conflict are forecast to add between $6 million and $8 million to H2 FY26 supply chain costs, with the impact to be primarily reflected in Retail gross margin. A further update on geopolitical impacts will be provided at the full-year results in August 2026.
$100m cost reduction program
Endeavour has also outlined a three-year cost reduction program targeting $100 million in savings to be delivered in FY27. The program spans store cost optimisation, labour efficiencies, centralised administration, procurement savings, and support office headcount reduction.
“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.”
