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Stock of the day
Endeavour Group
Endeavour expects first-half profit to fall to between $400 million and $411 million as discounting supports sales but continues to weigh on margins.
(AI video summary)
This video was created on 13 January 2026 for IG audiences by ausbiz.
ASX code: EDV
Endeavour flags profit decline as margins remain under pressure
Endeavour Group, a key player in retail and hospitality, is facing a projected profit decline for the first half of the financial year (FY), with expectations between $400 million and $411 million. Price cuts and promotions have boosted sales but strained margins and profitability.
Total sales rose by 1% to $6.6 billion, yet specialty stores saw a decline of over 16%. The hotels business, however, increased by 4.4%. Market sentiment remains cautious, with RBC Capital Markets setting a target price of $4, reflecting concerns despite the stock's current trading price.
Strategic challenges
Recent management changes, including new Chief Executive Officer (CEO) Jayne Hrdlicka, signal a need for strategic realignment. Since its spin-off from Woolworths, the share price has tended to decline, despite offering a potential 5% fully franked dividend yield.
Investment outlook
While consumer spending in Australia shows resilience, raising potential interest rate hikes by the Reserve Bank of Australia (RBA), retail segments like Endeavour face challenges aligning these trends with financial performance. This situation mirrors recent difficulties faced by other retailers like Super Retail.
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