Endeavour Group experienced a share price decline of over 5 per cent in Tuesday morning trading. This drop follows the company’s announcement that its group profit before tax for the first half of the 2026 fiscal year fell short of market expectations. Citi analyst Sam Teeger highlighted that while retail sales showed improvement during this period, this growth was partially attributed to increased discounting activities.
According to Teeger, this discounting pressure led to the group’s profit before tax at the mid-point being 7.5 per cent lower than VA Consensus estimates. Endeavour Group operates as a retail drinks and hospitality business. It owns a large portfolio of hotels and retail brands across Australia.
Despite the retail challenges, Teeger noted that Endeavour Group’s hotels division demonstrated resilience, with earnings aligning with consensus expectations. However, Citi has raised concerns regarding the sustainability of retail gross margins. The broker suggests that current long-term consensus forecasts may be approximately 75 basis points too high. This is unless competitive pressures subside or Endeavour Group successfully negotiates more favourable supplier terms under the leadership of its new chief executive, Jayne Hrdlicka.
Citi maintains a Neutral rating on Endeavour Group’s stock. Shares in Endeavour last traded down by 5.4 per cent, reflecting investor concerns over the profit miss and margin sustainability.
