Endeavour Group expects ‘flat to modest' growth for Dan Murphy's, BWS
Pubs and hotels giant Endeavour Group is tipping marginal growth for liquor chains Dan Murphy's and BWS amid ongoing weakness in consumer demand for booze.
In a third-quarter trading update released on Monday, Endeavour revealed the strong sales momentum at its pubs was in stark contrast to the performance of its national network of 1722 bottle shops.
Retail sales declined 3.1 per cent to $2.3 billion in the 13 weeks to the start of April, while hotels grew 5.1 per cent to $512 million. Total group sales fell 1.7 per cent to $2.8b.
The company — which last week appointed former Virgin Airlines boss Jayne Hrdlicka as its new chief executive — expects 'flat to modest' sales growth for its liquor stores for the rest of the fiscal year.
'In Q3 hotel sales improved while off-premise demand remained subdued and our retail business continued to recover from the impact of supply chain disruption,' Endeavour executive chair Ari Mervis said.
'We have made an encouraging start to Q4. In retail we delivered an Easter sales result in line with Easter sales in the previous year and in hotels we continued to see good growth across all drivers — food, bars, gaming and accommodation.'
Endeavour said consumer spending activity outside of key social occasions remained relatively subdued, noting there were only a limited number of such events left for the rest of the financial year.
While it expects retail trading conditions to gradually improve as inflation moderates and the prospects for interest rate cuts increase, the group warned cost inflation would remain a headwind for the remainder of the financial year.
Shares last traded at $4.16.
More to come.
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