Highlights

  • Metcash (ASX:MTS) shares closed at A$2.87, down 2.71% on 9 September 2026.
  • Metcash released a trading update on 9 September showing continued sales growth across all three operating pillars during the first 18 weeks of FY27.
  • Group sales increased 3.5% including tobacco and 2.8% excluding tobacco over the period.
  • Investors are monitoring cost inflation, sales mix, Food resilience, Liquor conditions and continued momentum in Hardware and Tools.

Metcash Limited (ASX:MTS) shares finished Wednesday under pressure, closing at A$2.87, down 2.71% on 9 September 2026.

The broader Australian market recorded only modest declines. The S&P/ASX 200 (ASX:XJO) closed at 8,911.40 points, down 0.11% on 9 September 2026, while the S&P/ASX 300 (ASX:XKO) finished at 8,842.30 points, down 0.12%.

Consumer Staples moved higher overall. The S&P/ASX 200 Consumer Staples (ASX:XSJ) closed at 13,170.4 points, up 0.25% on 9 September 2026.

Metcash therefore materially underperformed both the broader market and the Consumer Staples sector during the session. While the company also released a trading update on the same day, short-term share-price movements can reflect several factors and should not automatically be interpreted as a direct response to a single announcement.

Independent Retail Platform

Metcash operates one of Australia’s largest wholesale distribution and Marketing platforms supporting independent retailers.

Its operations span Food, Liquor and Hardware and Tools, with brands and networks including IGA, Foodland, Campbells, The Bottle-O, Cellarbrations, Mitre 10, Home Hardware and Total Tools.

The company’s scale is significant. Metcash said at its 2026 AGM that its platform serves around 105,000 customers, approximately 6,300 bannered retail stores and about 4,800 contract customers or stores, supported by 62 distribution centres. The group also works with roughly 5,500 suppliers and serves approximately 95% of Australians through its network.

This model gives Metcash exposure to essential consumer spending through groceries and liquor, while Hardware and Tools provides a more cyclical Earnings stream linked to construction, trade activity and renovation demand.

September Trading Update

Metcash released its 2026 AGM presentation and trading update on 9 September 2026, covering the first 18 weeks of FY27.

The company reported continued sales growth across all pillars. Group sales rose 3.5% including tobacco and 2.8% excluding tobacco. Food sales increased 3.8% including tobacco and 2.6% excluding tobacco, while Liquor sales increased 0.8%. Total Tools and Hardware recorded combined sales growth of 6.0%.

Within Food, supermarket sales increased 2.6% excluding tobacco and 1.3% including tobacco. Foodservice and Convenience sales increased 2.8% excluding tobacco and 11.3% including tobacco.

Superior Food Services reported sales growth of 2.7%, while Campbells and Convenience sales increased 3.0% excluding tobacco and 21.5% including tobacco. Total tobacco sales were up 11.7%.

Metcash said supermarket sales had remained resilient despite a highly competitive trading environment, while tobacco sales continued to improve in states where regulatory measures against illicit tobacco had been implemented and enforced.

Cost Pressure Remains

The trading update also highlighted several earnings pressures.

Metcash expects first-half earnings to be affected by adverse sales mix in Superior Food Services, the removal of the accelerated tobacco excise benefit and continuing cost Inflation across Food and Liquor.

The company estimated the FY27 impact from the cessation of the accelerated tobacco excise at around A$10 million, weighted toward the first half. It also said cost inflation remained above sales growth rates in parts of the Food and Liquor businesses.

Management said cost-out programs remain on track and are intended to reduce the impact of elevated cost pressures during the second half.

For investors, this means Revenue growth alone will not determine the earnings outcome. The ability to manage labour, logistics, distribution and other operating costs will remain important, particularly in businesses where wholesale margins can be relatively narrow.

Hardware Momentum

Hardware and Tools stood out as the strongest sales-growth area in the September update.

Total sales increased 6.0%, including growth of 9.8% at Total Tools and 5.0% in Hardware. Like-for-like network sales increased 3.8% at Total Tools and 5.4% in Hardware.

Management said sales momentum remained strong, although uncertainty in the broader market continued to affect the sector outlook.

The group is also progressing initiatives aimed at returning Hardware and Tools to mid-cycle margins following the integration of Total Tools and Independent Hardware Group.

At the AGM, Metcash said the integration had been completed, duplication removed and initial scale benefits delivered. The company also highlighted that Tools retail sales grew 7.2% in FY26.

FY26 Base

The September update builds on Metcash’s FY26 results released in June.

For FY26, group revenue was A$19.6 billion, up 0.7%, or 3.8% excluding tobacco. Group EBITDA increased 1.9% to A$761.7 million, while underlying EBIT was A$503.7 million.

Underlying profit after tax was A$268.8 million and Operating Cash Flow increased 3.5% to A$558 million. The company ended FY26 with a Debt Leverage Ratio of 1.0 times, at the lower end of its target range.

The Balance Sheet position provides Metcash with some flexibility as it continues investing in technology, retail growth and operating efficiency.

Its Horizon ERP program is also progressing, with the first release planned for the fourth quarter of calendar 2026 and the second release targeted for the first quarter of 2027.

Final Takeaway

Metcash (ASX:MTS) shares closed at A$2.87, down 2.71% on 9 September 2026, despite the broader Consumer Staples sector finishing 0.25% higher.

The company’s 9 September trading update showed continued sales growth across Food, Liquor and Hardware and Tools, with group sales increasing 3.5% including tobacco and 2.8% excluding tobacco during the first 18 weeks of FY27. Hardware and Tools delivered the strongest momentum, while Food sales remained resilient.

At the same time, investors are likely to keep a close watch on cost inflation, adverse sales mix, the loss of tobacco excise benefits, Liquor competition and the pace of Margin improvement in Hardware and Tools. These operating factors are likely to matter more to the longer-term Investment case than a single day’s share-price movement.