Endeavour Group (ASX:EDV) has released an F25 first quarter trading update. The company reported stable sales for the quarter. Sales for the 14-week period ending 6 October 2024 totalled $3.1bn, up slightly from $3.09bn in the same period last year.
Endeavour is a leader in the retail and hospitality sectors. It owns prominent retail brands like Dan Murphy’s and BWS, and operates over 350 hotels across Australia. It provides a diverse range of services including beverage retail, hospitality, and gaming.
CEO Steve Donohue highlighted the balanced performance across the company’s portfolio. “Endeavour Group delivered a stable trading performance in the first quarter as cost of living pressures continued to impact consumer spending in our categories. This result demonstrates the value of our diversified portfolio, with the moderation in Retail sales during the quarter offset by a stronger performance in Hotels,” he said.
The Hotels segment, which contributes significantly to Endeavour’s revenue, saw a 2.5% increase in sales, reaching $567m. Growth was fuelled by improvements across all key business areas, including food, bar, gaming, and accommodation, bolstered by events like Father’s Day and footy finals. The company also regained market share in Victoria’s gaming sector following recent regulatory changes.
Retail sales remained steady at $2.54bn, driven by Dan Murphy’s and BWS. Although in line with the prior year, the retail environment saw intensified promotional activity as consumers sought value deals, impacting profitability. The company expects the Retail Operating EBIT margin for H1 FY25 to be between 7.0% and 7.5%, compared to 8.0% in H1 FY24.
Endeavour Group has implemented measures to manage cost pressures, such as its endeavourGO optimisation program, which delivered $100m in savings in FY24. Additionally, the company has evolved its Jimmy Brings delivery service into a partnership with Milkrun and streamlined digital projects through its endeavourX division.
Looking ahead, Donohue expressed optimism for Q2, which includes major sales events like Black Friday and the Christmas season. “Our 30,000 team members are committed to ensuring that we are the destination of choice for our customers as they gather with friends and family to socialise and enjoy the holiday season,” he added.
Shares are trading 4.65% lower at $4.51.
