Endeavour Group reported flagging margin pressure and a decline in earnings on the prior corresponding period in its 1H26 results report but says improved retail sales momentum in 1H26 was largely due to increased investment in lower shelf prices.
The update marks the first trading statement under new CEO, Jayne Hrdlicka, who commenced in the role during the half and is now leading the group’s refreshed strategy across retail and hotels.
For the 27 weeks to 4 January 2026, Endeavour Group reported total sales of $6.68 billion, up 1.0 per cent on the prior year. Retail sales rose 0.3 per cent to $5.5 billion, while hotels delivered stronger growth of 4.4 per cent to $1.17 billion.
Sales across Dan Murphy’s and BWS increased 0.7 per cent to $5.4 billion, with momentum improving in the second quarter. Combined Q2 sales for the two banners grew 2.2 per cent, including a record December trading month, as customers responded to sharper pricing and increased promotional activity.
Hrdlicka said the pricing decisions were a deliberate move to rebuild top-line growth in a highly competitive market.
“The pricing and promotional decisions we have made in our Retail business have generated positive sales results, delivering on our aim to better align the customer propositions for each of our brands to re-ignite top line growth,” she said.
“In a competitive market landscape, we have focused on reinforcing customer confidence in the value we offer across all channels.”
The group said Dan Murphy’s delivered its biggest ever trading weeks leading into Christmas and New Year’s Eve, with Christmas Eve setting a new daily sales record. However, the increased investment in price and promotions weighed on margins, with retail gross profit margin expected to be approximately 85 basis points below the prior corresponding period.
Retail EBIT (pre significant items) is expected to be between $323 million and $328 million, down from $370 million a year earlier.
Hrdlicka said improving sales velocity remains a priority as the group works through a broader reset.
“A key step to realising the potential of our Retail brands is improving sales momentum, and as the first half progressed, we made a number of decisions to improve customer engagement and generate higher sales velocity, including investment in lower shelf prices,” she said.
“We are very pleased with the speed of customer reaction to our shelf price and targeted promotional activity, highlighting the strength in both retail brands.”
Hotels continued to outperform, with sales growth of 4.4 per cent in the half and strong performance across gaming, food and beverage and refurbished venues. The division delivered its strongest monthly sales result on record in December, supported by record trading in the lead-up to Christmas and on New Year’s Eve.
At a group level, EBIT (pre significant items) is expected to be between $555 million and $566 million, down from $595 million, while profit before tax (pre significant items) is forecast at $400 million to $411 million, compared with $437 million a year earlier.
The group also flagged significant items totalling a net pre-tax expense of approximately $45 million in the half. The largest component relates to one-off cessation costs associated with the planned closure of the Melbourne Liquor Distribution Centre in 2028, alongside hotel impairments, advisory fees and a one-off gain on the sale of gaming entitlements.
Endeavour said further detail on its refreshed strategy and cost-reduction initiatives will be provided at its half-year results presentation in March and investor day.
