Highlights

  • Endeavour, the owner of Dan Murphy's, BWS and a large pub and gaming portfolio, released preliminary figures on 5 August 2026 and the full result on 24 August 2026 for the year to June 2026.
  • Retail sales rose 0.7% to $10,016 million, and Hotels sales rose 4.2% to $2,196 million.
  • Underlying Earnings before interest and tax (EBIT) fell 8.7% to $845 million from $926 million, and underlying net profit after tax (NPAT) fell 14.8% to $363 million from $426 million.
  • Statutory NPAT was only $52 million, down 87.8%.
  • The difference is explained by significant items of $372 million before tax and $311 million after tax.

Endeavour Group Limited (ASX:EDV) operates Australian drinks retail businesses including Dan Murphy’s and BWS, alongside a portfolio of licensed hotels. Its FY26 results brought the balance between retail pricing, hotel Investment and profitability into focus, with higher sales accompanied by lower underlying earnings and significant asset write-downs.

Retail: trading Margin for volume

Retail is the profit engine and the problem. Combined Dan Murphy's and BWS sales rose 1.0%, with online sales up 34.8% to $1.1 billion, or 11.6% of retail sales. Management said lower shelf prices and promotions weighed on gross margin, an explicit decision to give up some margin in order to regain share. Retail sales have grown for 10 consecutive months, and momentum continued into the new financial year, according to the outlook.

Hotels: growth with heavy investment

Hotels produced the better operating result: EBIT rose 4.1% and accommodation Revenue rose 9.3%. Management plans a significant transformation to simplify operations and improve guest experience. FY27 is described as a year of investment, with up to 75 renewals and about 1,900 new gaming machines. Capital Expenditure for FY27 is guided at $550 million to $650 million.

Cost reduction and strategy

The company reaffirmed a $300 million cost-out target by FY29. Delivery matters: if savings are reinvested in price rather than reaching earnings, the benefit to shareholders is limited. The Woolworths agreement on distribution is a notable structural change, as logistics efficiency underpins any low-price strategy. Management gave no numeric earnings guidance. It said the consumer outlook remains uncertain because of higher living costs. Statements about momentum are management's own and not independently verified.

Risks and what to watch

Principal risks include further margin compression if competitors respond to price cuts, subdued consumer spending, regulatory change in gaming and alcohol, execution risk in the Hotels transformation and cost program, and rising Leverage if earnings fall while investment stays high. Higher net Debt reduces flexibility, and a bigger capital program in FY27 could keep it elevated.

Key Insights

Principal risks include further margin compression if competitors respond to price cuts, subdued consumer spending, regulatory change in gaming and alcohol, execution risk in the Hotels transformation and cost program, and rising leverage if earnings fall while investment stays high. Higher net debt reduces flexibility, and a bigger capital program in FY27 could keep it elevated.