Full Year 2026 Endeavour Group Ltd Earnings Call Transcript
Key Points
- Endeavour Group Ltd (EDVGF) delivered 10 consecutive months of retail sales growth, with Q4 retail sales accelerating to 2.2% and strong momentum continuing into FY27 with 4.6% sales growth in the first seven weeks.
- The company is gaining market share in retail, driven by successful price leadership and value investment, evidenced by record customer value-for-money scores at both Dan Murphy's and BWS.
- Hotels business showed resilience with 4.2% sales growth, record trading during key social occasions, and strong performance from renewal activity, with the FY24 cohort delivering over 20% ROI.
- The company reaffirmed its $300 million cost-out target by FY29, including $100 million in FY27, with 70% of FY27 initiatives already executed.
- Online sales in retail grew over 10% year-on-year, with BWS app monthly active users up 15% to over 730,000, and in-store transactions also trending back towards growth.
- The company completed 38 hotel renewals in FY26, up from 27 in FY25, and plans to double this to up to 75 venues in FY27, with a strong track record of returns.
- Underlying group EBIT declined 8.7% and underlying profit before tax fell 13.1%, primarily due to a 17.6% decline in retail EBIT from price investment and elevated promotional activity.
- Retail gross profit margin declined by 86 basis points to 23.6%, reflecting investment in lower shelf prices and increased competitive promotional activity.
- The company incurred significant items of $372 million pre-tax, including asset write-downs and restructuring costs, and impaired 75 retail stores.
- FY27 will be a year of heavy investment with increased CapEx of $550-$650 million and incremental OpEx of $40-$60 million, leading to expected leverage above the target range.
- Hotels sales growth moderated in FY27's first seven weeks to 2.2%, with softer trading across all key drivers and reduced spend-per-visit due to cost-of-living pressures.
- Finance costs are expected to rise to $330-$340 million in FY27 due to increased net debt and interest rates, and the company expects negative free cash flow in the near term.
Thank you for standing by, and welcome to the Endeavour Group Limited FY26 results management briefing. (Operator Instructions)
I would now like to hand the teleconference over to Jayne Hrdlicka, CEO. Please go ahead.
Good morning, everyone. Thanks for joining us today for Endeavor Group's full-year '26 results presentation. I'm Jayne Hrdlicka, Chief Executive Officer of Endeavor Group; and I'm joined today by our Chief Financial Officer, Kate Beattie.
I'd like to begin today by acknowledging the Gadigal people as the traditional custodians of the land we're presenting from today and pay my respects to their elders, past, present, and emerging.
I'll begin the discussion on slide 4 and speak briefly to the group's F26 highlights. As you know, F26 was a year of multiple parts. The first quarter of the year, we began pulling together the facts, looking through the lens of our numbers, the customer, the competitor, and our people to enable our strategy refresh while trading
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