Endeavour Group sees retail profits hurt by low-cost push

Australia’s largest retail drinks and hospitality company, Endeavour Group, has taken a backward step in profitability in its most recent earnings report.

The first-half of the 2026 financial year included cause for celebration; liquor retailer Dan Murphy’s broke records through the Christmas sales period.

But these sales, alongside BWS and ALH Hotels, couldn’t stop Endeavour Group from seeing its net profit after tax decline by 17.1 per cent year-on-year, to $247 million.

With 1742 stores in its retail drinks division, a 0.2 per cent increase in sales took half-year revenue to $5.5 billion. Gross profit margin fell by 84 basis points to 23.9 per cent. The group said this was “reflecting investment in lower shelf prices and elevated levels of promotional activity market-wide”.

Hotels, on the other hand, recorded a stronger uplift in revenue across the period. Finishing the half-year with $1.1 billion in revenue, a 4.4 per cent increase, the division’s gross profit margin also widened by 12 basis points to 85 per cent.

Retail network expansion and the group’s hotel renewals program pushed spending up by $71 million in the period. After adding 22 new stores to its retail network and completing 21 hotel renewals, the group forecasts similar expenditure for the remainder of the fiscal year as it continues its expansion.

Endeavour Group is continuing its efforts to establish Dan Murphy’s and BWS as the price leaders in their markets. Going forward, the group expects gross margin to be affected by these efforts. 

In the second half of the financial year, the group is looking to add three Dan Murphy’s stores and close three BWS stores.

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