Steady Growth for Endeavour Group Despite Cost Pressures

November 11, 2024 11:12 AM AEDT | By Team Kalkine Media
 Steady Growth for Endeavour Group Despite Cost Pressures
Image source: shutterstock

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. 


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.