Endeavour shares slump after flagging layoff plans
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More news: Shares in Endeavour Group tumbled in early trade after the company unveiled a three-year cost reduction program, which includes layoffs in its support office.
Shares had fallen 7.60% to $3.16 at 11:05am AEST.
RBC Capital Markets analyst Michael Toner said the third quarter sales growth was ahead of consensus. While the cost saving program lifted his FY27 earnings guidance, he added that he views the update as mixed to marginally softer on balance.
Toner holds a sector perform rating with a price target of $4.
Endeavour Group posts 1.2% sales rise, begins $100m cost-out plan including job cuts
The news: Dan Murphy’s and BWS owner Endeavour Group reported a 1.2% increase in group sales in the FY26 second half to date, and unveiled a $100 million cost reduction program including layoffs in its support office.
The numbers: Endeavour saw a 3.7% rise in sales in its hotels business during the first 16 weeks of the second-half period, while its retail segment saw a 0.7% lift.
The group said elevated fuel and freight prices are expected to increase second-half supply chain costs by between $6 million and $8 million.
Endeavour also announced a three-year cost reduction program, aimed at delivering $100 million in cost savings by FY27. The program will include initiatives focused on store cost optimisation, labour efficiencies, centralised administration, procurement savings and supporting office headcount reduction.
The context: The group said sales momentum in its hotels business moderated towards the end of the third quarter, reflecting growing cost of living pressures.
It is also taking steps to minimise impacts from the Middle East conflict, including efforts to mitigate supply disruption and elevated fuel and freight costs.
What they said: “Despite challenging macroeconomic conditions and geopolitical uncertainty impacting consumer sentiment, our retail business has maintained positive sales growth,” said Endeavour CEO Jayne Hrdlicka.
“We remain confident in the defence revenue characteristics of the hotels business which has a track record of strong cashflow generation supported by through-the-cycle consumer demand.”
The source: ASX
