Endeavour Group Posts Record AU$12.3 Billion Sales as Liquor Stores Lead Growth

Highlights:

• Record Sales Achievement: Endeavour Group (ASX: EDV) posted record sales of AU$12.3 billion, with retail liquor sales reaching AU$10.2 billion, a 3.4% increase.
• Cost Efficiency Success: The company's cost reduction program, endeavourGO, saved $100 million, boosting retail EBIT by 4.9% to AU$1.1 billion.
• Hotel Division Outperformance: Hotel revenue grew by 4.2% to AU$2.1 billion, exceeding market expectations and contributing to a 3.7% increase in hotel EBIT.

Retail Sales Surge Amid Strong Liquor Store Performance

Endeavour Group (ASX: EDV), the parent company of Dan Murphy’s and BWS, achieved record sales of AU$12.3 billion for the 53 weeks ending June 30, 2024. This 3.6% increase was primarily driven by robust performance in its retail liquor segment, where the company's membership program played a key role in boosting revenue. Retail sales reached AU$10.2 billion, reflecting a 3.4% rise, or 1.7% on a 52-week basis, aligning with analysts' expectations. Comparable store sales at BWS and Dan Murphy's grew by 1.1%, underscoring the steady demand for alcohol retail.

Cost Reduction Boosts Retail Earnings

Endeavour Group’s cost reduction initiative, endeavourGO, contributed significantly to the company's financial performance. The program delivered AU$100 million in savings, helping to lift retail earnings before interest and taxes (EBIT) by 4.9% to AU$1.1 billion. This strong result underscores the effectiveness of the company’s operational efficiencies and strategic focus on retail growth.

Hotels Outperform Expectations

The hotel division also performed well, with revenue rising 4.2% to AU$2.1 billion, or 2.3% on a 52-week basis, outpacing market predictions of a 2% increase. Hotel EBIT grew by 3.7%, driven by improved food and bar offerings, further solidifying the group's diversified revenue streams.

Challenges Ahead Despite Strong Performance

Despite these gains, Endeavour Group reported a 3.2% decline in net profit to AU$512 million, largely due to higher finance costs. The company declared a fully franked final dividend of 7.5¢ per share, totaling AU$390 million for the year. Looking ahead, Endeavour Group flagged a slower start to the new fiscal year, with early sales in retail and hotels showing modest growth of 0.6% and 2%, respectively.

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