Endeavour Group Limited (ASX: EDV) has given investors a clear picture of where the business stands halfway through its financial year. The Company announced preliminary results for the 27 weeks ending 4 January 2026, revealing a strategic shift in how it approaches retail pricing.
Figure 1: Generic liquor retail setting. [Source: Endeavour Group]
The numbers tell a story of deliberate trade-offs. Total Group sales rose 1.0 per cent to $6.68 billion, but profit expectations have been dialled back. Group Profit Before Tax is now expected to land between $400 million and $411 million, down from $437 million in the same period last year.
What stands out is not just the financial outcome, but the reasoning behind it. Endeavour Group has placed a bold bet on lower shelf prices to win back customer confidence and drive sales momentum. The question now is whether this gamble will pay off in the long run.
Retail Sales Momentum Builds Through Lower Pricing Strategy
Endeavour Group saw its Retail division gain pace in the second quarter. Dan Murphy’s and BWS together posted sales growth of 2.2 per cent in Q2, reversing a 1.0 per cent decline in Q1. For the full half, combined sales from these two brands rose 0.7 per cent to $5.4 billion.
EDV trading update shows that December delivered a record sales month for the Company. Dan Murphy’s recorded its biggest ever trading weeks before Christmas and New Year’s Eve, with Christmas Eve alone setting a new daily sales record. The momentum reflects customer response to sharper pricing and targeted promotions.
Figure 2: A Dan Murphy’s store. [Source: The Shout]
Endeavour Group sharpened its focus on price leadership during Q2. The Company invested in lower shelf prices and reinforced Dan Murphy’s lowest liquor price guarantee. This approach came at a cost. Retail Gross Profit margin is expected to fall approximately 85 basis points below the prior corresponding period.
Retail EBIT for H1 FY26 is forecast between $323 million and $328 million, down from $370 million last year. The Company acknowledged the margin pressure but defended the strategy as necessary to re-ignite top-line growth in a competitive market.
EDV Share Price Supported By Hotels Division Strength
Endeavour Group’s Hotels business posted solid results across the half. Sales increased 4.4 per cent to $1.2 billion, with Q2 growth matching the 4.4 per cent achieved in Q1. Gaming, refurbished venues, and food and bar transactions all contributed to the performance.
December was the Hotels division’s strongest month on record. The week before Christmas delivered record sales, while New Year’s Eve set new benchmarks for food, bar, and accommodation revenue. EBIT from Hotels is expected to range between $271 million and $275 million for the half.
The EDV trading update explains that the Company sees significant potential in its Hotels portfolio. Management plans to roll out a refreshed strategy aimed at creating additional value across the estate. Further details will be shared later in the year.
What The Numbers Mean For EDV Shares And Investor Outlook
Endeavour Group CEO Jayne Hrdlicka defended the pricing decisions made during the half. She noted that the strategy has delivered on its aim to better align customer propositions and re-ignite top-line growth. Customer reaction to shelf price adjustments and promotional activity has been swift and positive.
Figure 3: Endeavour Group CEO Jayne Hrdlicka. [Source: Endeavour Group]
The EDV trading update reveals that the Company is preparing to implement a range of initiatives under its refreshed strategy. These include improving the sophistication of in-store price execution, enhancing customer impact both in-store and online, and advancing cost reduction efforts. Management cautioned that it will take time for these initiatives to be implemented and for full benefits to materialise.
Endeavour Group expects to incur a net expense of approximately $45 million (pre-tax) related to significant items in H1 FY26. Around $40 million of this relates to a provision for one-off cessation costs tied to the closure of the Melbourne Liquor Distribution Centre in September 2028. The Company has secured a new 10-year contract with a global supply chain provider for a replacement Victorian Distribution Centre, expected to deliver material benefits over the contract term.
Group EBIT (pre-significant items) is forecast between $555 million and $566 million for H1 FY26. The Company will provide further details at its half-year results presentation scheduled for 4 March 2026.
Industry Outlook: Retail Liquor Market Faces Intensifying Competition
The EDV trading update demonstrated that the Australian retail liquor market remains highly competitive, with players battling for market share through aggressive pricing and promotional activity. Consumer spending patterns continue to favour value-driven propositions, particularly as households manage cost-of-living pressures. Endeavour Group’s strategic pivot towards price leadership reflects broader industry dynamics where maintaining customer loyalty requires balancing margin sustainability with competitive pricing.
EDV Share Price Performance
EDV shares closed at $3.700, giving the Company a market capitalisation of $6.84 billion. The stock has traded within a 52-week range of $3.450 to $4.570 per share. With the given EDV share price, investors will be watching closely to see whether the retail pricing strategy translates into sustained sales growth and eventual margin recovery in the second half.
Figure 4: EDV share price performance over the past six months. [Source: ASX]
Final Thoughts
Endeavour Group has made a clear strategic choice. Lower prices have brought customers back through the door, but they have also squeezed margins in the near term. The EDV trading update shows that the Company is banking on volume growth and future operational improvements to offset the current profit pressure.
Hotels continue to perform well and provide stability. The division’s strong festive period performance demonstrates its capacity to deliver consistent growth even as Retail undergoes strategic repositioning. Management’s commitment to a refreshed strategy across both divisions suggests that further changes may be on the horizon.
For investors holding EDV shares, the key question is timing. How long will it take for the Retail turnaround initiatives to show meaningful results? The half-year results in March should provide more clarity on the path ahead.
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FAQs
Q1. What were Endeavour Group’s H1 FY26 total sales?
Ans. Endeavour Group reported total Group sales of $6.68 billion for the 27 weeks ending 4 January 2026, representing growth of 1.0 per cent compared to the prior corresponding period.
Q2. Why did Endeavour Group’s profit expectations decline?
Ans. Group Profit expectations decline due to lower Retail Gross Profit margin, which fell approximately 85 basis points as the Company invested in lower shelf prices and promotional activity.
Q3. How did Dan Murphy’s and BWS perform in Q2?
Ans. Dan Murphy’s and BWS delivered combined sales growth of 2.2 per cent in Q2.
Q4. How has the EDV share price reacted to the H1 FY26 trading update?
Ans. Following the EDV trading update, the EDV share price has remained relatively supported, closing at $3.700.
