Endeavour Group has reported modest sales growth but weaker earnings for the first half of FY26 as the liquor and hospitality giant stepped up price investment and accelerated capital spending across its network.
For the 27 weeks to 4 January 2026, the owner of Dan Murphy’s, BWS and the ALH Hotels portfolio recorded group sales of $6.7 billion, up 0.9 per cent, while underlying EBIT fell 5.4 per cent to $563 million. Underlying net profit after tax declined 6.7 per cent to $278 million, while statutory NPAT fell 17.1 per cent to $247 million following the recognition of significant items.
The board declared a fully franked interim dividend of 10.8 cents per share, down from the previous year.
CEO Jayne Hrdlicka said the result reflected early progress in rebuilding retail sales momentum in a challenging consumer environment.
“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,” Hrdlicka said.
“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.”
Retail: growth returns but margins tighten
Retail sales across the company’s liquor store network edged 0.2 per cent higher to $5.5 billion, with combined Dan Murphy’s and BWS sales up 0.7 per cent.
Sales momentum strengthened in the second quarter, with the two brands delivering 2.2 per cent growth, supported by strong trading in December, including record weeks leading into Christmas and New Year’s Eve.
However, retail profitability declined as the company leaned heavily into price competitiveness.
Underlying retail EBIT fell 11.6 per cent to $327 million, while the underlying EBIT margin dropped to 5.9 per cent, reflecting investment in lower shelf prices and increased promotional activity across the liquor category.
Online sales continued to expand rapidly, rising 35.1 per cent to $608 million, with e-commerce now accounting for 11.3 per cent of Dan Murphy’s and BWS sales.
Hotels business delivers stronger performance
In contrast, Endeavour’s Hotels division continued to deliver solid growth.
Hotel sales increased 4.4 per cent to $1.17 billion, with comparable venue sales rising 4.2 per cent, supported by strong food and bar transactions, resilient gaming revenue and improved accommodation performance during major events.
Underlying EBIT for the segment rose 5.0 per cent to $275 million, with margins improving slightly to 23.5 per cent.
The company completed 21 hotel renewals in the first half, while installing more than 800 new electronic gaming machines, part of a broader investment program aimed at lifting venue performance.
Cash flow, investment and balance sheet
Operating cash flow remained strong at $997 million, delivering an underlying cash realisation ratio of 165 per cent.
Capital expenditure increased significantly during the period, reaching $222 million, driven by retail store expansion and accelerated hotel refurbishments.
Net debt fell by $34 million, leaving the group with an underlying leverage ratio of 3.3 times EBITDA.
Strategy reset underway
The results come as Endeavour finalises a broader strategic review under its refreshed leadership team.
The group has confirmed it will retain both its retail and hotels businesses, focusing on restoring price leadership in liquor retail, accelerating investment in hotel refurbishments and simplifying the overall operating model.
The company plans to provide further details of its strategy at an Investor Day scheduled for 27 May 2026.
Outlook
Trading in the early weeks of the second half showed continued momentum, with retail sales up 1.3 per cent and hotel sales up 4.5 per cent.
However, Endeavour warned the outlook remains uncertain given ongoing inflationary pressure and higher interest rates weighing on consumer spending.
The group expects FY26 capital expenditure of between $460 million and $500 million, reflecting increased investment in hotel renewals and technology initiatives.
Despite the softer earnings result, Hrdlicka said the company’s scale, brands and value proposition position it well to compete in a market where consumers remain highly focused on price.
