Endeavour Group Limited (ASX: EDV) today announced its first quarter trading results for fiscal year 2025, highlighting stable sales with a strong performance in the Hotels segment. During the 14 weeks from 1 July to 6 October 2024, the group reported total sales of $3,105 million, reflecting a modest increase of 0.5% compared to the same period last year.
Key Highlights of Q1 F25:
The Retail segment maintained steady sales at $2,538 million, mirroring the performance from Q1 F24. The sector experienced a slowdown in September due to heightened promotional activities as consumers showed heightened price sensitivity. The Hotels segment enjoyed a 2.5% increase in sales to $567 million, driven by robust performance across all business areas, including food, bar, gaming, and accommodation.
Management Commentary:
Steve Donohue, Managing Director and CEO of Endeavour Group, shared insights on the quarter's performance: "Our diversified portfolio has shown resilience in a challenging market, with cost of living pressures impacting consumer spending. The stable performance in Retail was complemented by strong growth in Hotels, showcasing the strategic value of our balanced business model."
Strategic Initiatives and Cost Management:
The company continues to implement strategic measures to enhance operational efficiency and manage costs effectively: The endeavourGO program delivered $100 million in cost savings in F24, enhancing sales per labour hour through activity-based rostering. The One Endeavour system integration is on track for completion by the end of F25, aiming to streamline operations and reduce overheads. A new partnership model with Milkrun for the Jimmy Brings business is expected to be EBIT accretive from the first year, reducing Endeavour’s fixed costs and streamlining the ecommerce operating model.
Future Outlook and Guidance:
Looking ahead to the holiday season, Endeavour Group remains cautiously optimistic with events like Black Friday and Christmas expected to drive significant consumer engagement. The company anticipates the H1 F25 Retail Operating EBIT margin to be between 7.0% and 7.5%, reflecting ongoing market and cost pressures.
Capital Expenditure and Financial Position:
The CapEx guidance remains steady at $450 million to $500 million for F25. Finance costs are expected to stay within the guidance range of $310 million to $325 million.
Investor and Analyst Communication:
Endeavour Group will host a conference call for analysts and investors today at 10:30 AM AEDT to discuss the quarterly results and provide further insights into the company's strategy and operational plans.
