Metcash (ASX:MTS) Reports FY26 Revenue Growth and Targets New Structural Cost Savings

Aditi Sarkar

06 November 2026 10:34 PM AEDT

Metcash (ASX:MTS) Reports FY26 Revenue Growth and Targets New Structural Cost Savings

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Highlights

Metcash reported FY26 group Revenue of AUD 19.63 billion, up 0.7%, with growth of 3.8% when excluding overall tobacco sales.
Food EBIT increased 5.4% to AUD 261.8 million, supported by IGA supermarket sales and disciplined cost management across wholesale operations.
Hardware and Tools EBIT fell 6.3% to AUD 177.3 million despite revenue growth as store expansion and costs weighed heavily.
Metcash declared a franked final Dividend of 9.5 cents and outlined annual structural savings of at least AUD 25 million.

Metcash Limited (ASX:MTS) is Australia's leading wholesale distribution and Marketing company for independent retailers, supplying grocery, liquor, and hardware products through its three pillars: Food (IGA, Foodland, and other supermarket banners), Liquor (Cellarbrations, The Bottle-O, IGA Liquor, and others), and Hardware & Tools (Mitre 10, Home Timber & Hardware, Total Tools). Metcash's financial year ends in late April. FY26 results for the year ended 30 April 2026 were released on 22 June 2026.

FY26 Revenue and Underlying Earnings

Metcash reported FY26 group revenue of $19.63 billion, up 0.7% from $19.50 billion in FY25. Excluding tobacco (which is in structural decline and reduces revenue without impacting EBIT), group revenue grew a healthier 3.8%. The Food pillar's revenue, excluding tobacco, rose approximately 2.6%, with IGA retail like-for-like sales up 0.6% and food revenue overall up 5.4% excluding tobacco. Liquor revenue increased 1.0% to $5.36 billion. Hardware & Tools revenue grew 4.3% to $3.7 billion. Group underlying EBITDA was $761.7 million (+1.9%), while underlying EBIT fell 0.8% to $503.7 million. Underlying NPAT was $268.8 million, down 2.4% from $275.4 million.

Segment Performance

The Food pillar was the standout in FY26, with EBIT growing 5.4% to $261.8 million, as Metcash's wholesale support for independent IGA retailers improved and category mix shifted toward higher-margin lines. Liquor EBIT was $100.1 million, down slightly year-on-year due to a soft 1H FY26 market, with Market Share rising to 32.3% and improved margins in the second half. Hardware & Tools EBIT was $177.3 million, down 6.3%, as the rapid expansion of the Total Tools retail network (opening new stores) and increased central marketing and technology Investment weighed on near-term margins despite strong revenue growth. The board declared a fully franked final dividend of 9.5 cents per share (flat on the prior year), bringing the full-year dividend to 18 cents per share.

Cost Reduction and FY27 Outlook

Metcash announced a structural cost reduction program targeting at least $25 million in annual savings by FY27, focused on procurement, operational efficiencies, and technology-enabled distribution. Management entered FY27 with growing momentum, noting improved Food and Liquor trading in the early weeks of FY27. The Total Tools network continued its organic rollout, with the long-term Earnings contribution expected to build as the new stores mature. The company also confirmed ongoing commitment to its independent retailer network, noting that independents are growing market share in both grocery and hardware as consumers seek local alternatives to large chains.

Stock Price Information

Shares in Metcash Limited (ASX:MTS) fell approximately 1.9% on the day of the FY26 results release, trading around $3.12–3.16, as investors weighed the modest revenue growth and slight NPAT decline against the improving cost discipline narrative. As of 6 November 2026, MTS shares were trading at approximately $3.00 on the ASX. Investors should refer to ASX announcements at www.asx.com.au and Metcash's Investor relations at www.metcash.com for current pricing.

FAQs

Q: What is Metcash's wholesale distribution model?

A: Metcash acts as a wholesale distributor and marketing support provider to independent retailers across Australia. Rather than owning most of its retail stores directly, Metcash buys products from suppliers and distributes them to independently owned IGA supermarkets, Cellarbrations bottle shops, Mitre 10 and Home Timber & Hardware stores, and Total Tools outlets (which are mostly franchise or company-owned). Metcash earns a margin on the wholesale distribution and charges service fees, while providing the independent retailers with banner brand support, marketing, and logistics. This model means Metcash's revenue includes both the wholesale sale price and charge-through sales.

Q: Why did Hardware EBIT fall despite revenue growth?

A: Metcash's Hardware & Tools EBIT fell 6.3% to $177.3 million in FY26 despite revenue growing 4.3% to $3.7 billion. The primary reasons were the costs associated with the rapid organic expansion of the Total Tools franchise network (opening new stores requires upfront investment in fit-out, training, and systems), increased central overhead to support the growing network, and higher technology and digital investment costs. As the new Total Tools stores mature and generate higher sales volumes, management expects EBIT margins to recover and grow. The hardware market also faced slightly softer consumer spending in home improvement categories in FY26.

Q: What is Metcash's dividend policy and payout in FY26?

A: Metcash has a policy of paying a fully franked dividend to shareholders, targeting a payout ratio of approximately 60–70% of underlying NPAT. For FY26, the board declared a final dividend of 9.5 cents per share (flat on FY25), bringing the total FY26 fully franked dividend to 18.0 cents per share (interim 8.5 cents + final 9.5 cents). The final FY26 dividend had a record date of 15 July 2026 and was paid in cash on 26 August 2026.

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