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The Endeavour Group Ltd (ASX:EDV) share price has come under pressure this Monday morning, falling by 2.5% to $5.39. This decline follows the release of the company's full-year results, which did not meet analyst profit expectations.
FY 2024 Results Overview
For the year ending June 30, Endeavour Group, an ASX consumer stock, reported group sales of $12.3 billion, reflecting a 3.6% increase. This growth was driven by a 4.2% rise in Hotel sales, reaching $2.1 billion, and a 3.4% increase in retail sales, totaling $10.2 billion. Group operating EBIT rose by 4.9% to $1.1 billion, although this figure is 3.4% when adjusted for a 52-week year. This result excludes $45 million in operating expenses related to the One Endeavour Technology (OET) program.
The net profit after tax for the year decreased by 3.2% to $512 million, attributed to rising finance costs. Despite the dip in profit, the board maintained the full-year dividend at 21.8 cents per share, including a fully franked final dividend of 7.5 cents per share.
Comparing Results to Expectations
Endeavour’s results were largely in line with sales and EBIT expectations but fell short of net profit forecasts. This disparity may have contributed to the drop in the Endeavour share price.
Management’s Perspective
Endeavour Group’s CEO, Steve Donohue, expressed satisfaction with the results, highlighting the resilience of the company’s brands and businesses despite challenging market conditions. The Retail and Hotels segments showed growth in sales and EBIT, demonstrating the effectiveness of Endeavour’s strategies even in a softening consumer environment.
Donohue noted the continued appeal of Dan Murphy’s due to its Lowest Liquor Price Guarantee and the benefits of the My Dan’s membership program, which has shown a strong scan rate and higher spending by members.
Looking Ahead
The company is optimistic about the future, noting improved underlying sales momentum in both Retail and Hotels for the early weeks of FY 2025. While the comparison is affected by the FIFA Women's World Cup and related events from the previous year, early sales growth has been promising. Key upcoming events such as Father's Day, Cyber Week, and the festive season are expected to drive performance, supported by Endeavour’s value proposition and growing customer loyalty.
Endeavour Group is focused on managing costs and executing its strategic commitments to deliver value to shareholders while navigating a challenging market environment.
