Food and drink trump gambling growth at Endeavour

afr.com:

A jump in socialising at Endeavour Group’s pubs helped the company post a 2.5 per cent rise in sales to $11.9 billion last year, as a strong hotels unit underpinned higher profit at the group.

Despite the shaky consumer environment, Endeavour’s sales at its retail businesses – including Dan Murphy’s and BWS liquor chains – were up 2.5 per cent in the first six weeks of the new fiscal year, and revenue gained 4.6 per cent at its hotels division, which posted double-digit growth in the year just ended.

The $10.4 billion company that was spun out of supermarket giant Woolworths two years ago posted a bottom-line net profit of $529 million, up 6.9 per cent from a year ago’s $495 million. This was lower than what some analysts were expecting.

Group earnings before interest and tax rose 10.7 per cent to $1.02 billion in the 52 weeks ended June 25.

Sales improved in the retail business – which now stands at more than 1700 stores – over the year, with the division posting full-year sales of $9.9 billion, a fall of 1.8 per cent. The first half reflected elevated pandemic performance from the previous year, with sales 3.7 per cent softer, but the second half returned to growth with sales improving in May and June helping to eke a 0.7 per cent gain.

Retail EBIT fell 1.2 per cent to $658 million, missing some analysts’ expectations.

Its 354 hotel businesses (including five managed clubs) surged back to life in its first period of unrestricted trading since 2019. Sales jumped 31 per cent to $2 billion over the 2023 year, and EBIT also gained strongly by nearly 36 per cent to $428 million.

More activity at the group’s venues, such as the Crows Nest Hotel on Sydney’s lower north shore, has contributed to growth in the past year. Louie