Endeavour Group shares lower on FY profit dip
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The news: Dan Murphy's and BWS owner Endeavour Group reported full-year earnings roughly in line with guidance as the retail group cited "challenging trading conditions" and a "softening consumer environment".
The numbers: Endeavour reported net profit after tax of $512 million, down 3.2% compared to FY23 but in-line with consensus forecasts of $512.3 million, according to Visible Alpha data.
Group sales lifted 3.6% year on year to $12.3 billion while group EBIT gained 3.1% to $1.1 billion. The group declared a total dividend of 21.8 cents per share, in line with last year's pay out.
Endeavour shares fell 3.2% to $5.36 at market open on the ASX.
The context: Endeavour said that underlying sales momentum in both its retail and hotels segments improved slightly in the first seven weeks of FY25 compared with the fourth quarter of FY24.
The group noted that it continues to respond to inflationary pressures by tightly managing cost of doing business, including progressing optimisation initiatives under its endeavourGO program, which is targeting a minimum of $290 million in cumulative savings by FY26.
Jarden analysts said it was a "clean result with cash flow strong". However, they noted the start to FY25 was slightly below expectations which when coupled with slightly higher FYY25 net interest guidance might see consensus trim forecasts into FY25 and the stock would likely be weaker today.
What they said: "... we think management are executing well and we would expect once market sees Coles result tomorrow, the share divergence becomes more evident," Jarden said.
Endeavour's managing director and CEO Steve Donohue said: "Endeavour Group's FY24 financial results demonstrate the resilience of our brands and businesses in response to challenging trading conditions, with both our retail and hotels segments delivering sales and EBIT growth in a softening consumer environment".
"With household budgets under pressure, value-consious consumers continue to seek out Dan Murphy's for its well-known Lowest Liquor Price Guarantee, expert service and market-leading range," he said. "We remain focused on tight cost management in an inflationary environment, with our optimisation program endeavourGO achieving $100 million in savings in the year."
The source: ASX announcement
