Since releasing its end of year results this morning, Endeavour Group’s share price has dropped over 4% on the ASX after profits failed to match expectations. This is in spite of net sales revenue growing by 3.3% to a worth of $12.3 billion, and profits before tax increasing 3.1% to a worth of $1.1 billion. Net profits after tax totalled $512 million, 3.2% less than last year’s results. Furthermore, given that Endeavour Group’s Financial Year 2024 had an additional week compared to the previous year, comparative sales were only up 1.8% while comparative profits were down 4.3%.
According to CEO Steve Donohue, “Endeavour Group’s F24 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.”
Endeavour Group’s two retail banners, Dan Murphy’s and BWS, collectively recorded over $10 billion in total retail sales. This is an increase of 3.7% on Financial Year 2023.
“With household budgets under pressure, value-conscious consumers continue to seek out Dan Murphy’s for its well-known Lowest Liquor Price Guarantee, expert service and market-leading range,” said Donohue.
“Our My Dan’s membership program has enhanced its range of member-exclusive discounts and personalised offers for its 5.4 million active members, delivering a strong 83% scan rate, with members spending 80% more per transaction than non-members.
“BWS remains Australia’s most convenient drinks retailer with more than 1,400 stores, and an expanded range of delivery partners. We delivered even more value for customers with the launch of ‘Appy Deals’, our new member pricing digital offer that increased monthly active app users by 155%.
Additionally, Endeavour Group’s ALH Hotels and Pinnacle Drinks also recorded strong performances in what were difficult trading conditions. Throughout FY24, Endeavour Group launched its pub+ loyalty app, and drove operational and margin improvement through AI and improved trade planning.
“In Hotels, optimised food and bar menus and upgrades to accommodation delivered sales and gross profit margin improvement,” said Donohue.
“Gaming returned to growth in H2, supported by investment in new games. We made progress on our pipeline of targeted renewals, with renovated venues delivering an enhanced guest experience and improved performance.
Pinnacle Drinks registered $1.8 billion in sales over the financial year, an increase of 4%. Throughout FY24, over 900 Pinnacle Drinks products received awards across major competitions globally.
Steve Donohue said, “Pinnacle Drinks continued to leverage customer insights to drive product innovation, with circa 400 new products launched during the year driving over 50% of Pinnacle’s growth… with over half coming from wine where growth was driven by the premium and luxury segments.”
The results also follow on from Woolworths announcing recently it will be selling off 5% of its 9.1% stake in Endeavour Group. This morning, Donohue said that work was underway “to separate from Woolworths systems and simplify our technology landscape, with a new Property Lease Management System implemented.
“We expect to complete People Systems and commence Store systems in F25, with our ERP build to commence in F26.”
Looking forwards, Steve Donohue says Endeavour Group is well positioned to further develop its reputation as a leading Australian liquor retailer and hotel owner.
“With our brands and venues being Australia’s go-to destinations for social occasions and events, we look forward to key upcoming first half trading events such Father’s Day, Cyber Week and the festive season, with our unrivalled value proposition, growing loyalty base and compelling consumer offer positioning us to perform well,” he said.
“We will continue to focus on tightly managing our costs as we execute our strategy scorecard commitments to deliver value for shareholders.”
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