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Highlights
- Endeavour Group reports stable Q1 FY25 sales amid cost challenges.
- Hotels segment sees growth, offsetting steady performance in retail.
- Company focuses on cost management strategies and digital initiatives.
Endeavour Group (ASX:EDV) has shared its Q1 FY25 trading update, indicating a stable sales performance despite ongoing cost pressures affecting consumer spending. For the 14-week period ending October 6, 2024, ASX consumer stock Endeavour reported sales totaling $3.1 billion, slightly above last year’s $3.09 billion for the same period. This resilience underscores the company’s strong position within the retail and hospitality sectors, where it operates well-known brands like Dan Murphy’s and BWS, along with over 350 hotels across Australia.
Endeavour Group’s CEO, Steve Donohue, noted the balanced performance across the company’s diverse portfolio. He attributed the steady quarter to the company's range of offerings, which allowed a stronger performance in the Hotels segment to offset a moderation in retail sales. Donohue commented on the company’s approach amid economic challenges, stating, “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.”
In the Hotels segment, which is a substantial revenue driver for Endeavour, sales grew by 2.5% to reach $567 million. Key business areas, including food, bar, gaming, and accommodation, contributed to this increase. Events like Father’s Day and major footy finals also helped boost sales in this segment. Furthermore, the company regained market share in Victoria’s gaming sector following recent regulatory changes.
Meanwhile, retail sales remained steady at $2.54 billion, bolstered by Endeavour’s flagship brands, Dan Murphy’s and BWS. Although the retail environment saw intensified promotions as customers sought value, this factor did slightly impact profitability. Endeavour anticipates that the Retail Operating EBIT margin for the first half of FY25 will range between 7.0% and 7.5%, a slight decline from 8.0% in H1 FY24.
In response to these pressures, Endeavour Group has actively implemented measures to manage costs. Its endeavourGO optimization program has already saved the company $100 million in FY24. Additionally, the company has enhanced its Jimmy Brings delivery service through a partnership with Milkrun, while also streamlining digital projects via its endeavourX division.
Looking forward to the second quarter, Donohue expressed confidence, emphasizing the significance of upcoming events such as Black Friday and Christmas. He noted the dedication of Endeavour’s 30,000 team members to creating memorable experiences for customers during the festive season.
