The Metcash Ltd (ASX: MTS) share price is under the spotlight today after the business announced its FY26 first-half result.
Metcash has three segments. It has a food division that supplies IGA supermarkets around Australia. Business food customers like hotels, pubs, cafés and others requiring food delivery are serviced through the Superior Foods business. Its liquor division supplies numerous independent liquor retailers like IGA Liquor, Cellarbrations and Thirsty Camel. Finally, it has a number of hardware businesses including Mitre 10, Home Hardware, Total Tools and several others.
Metcash FY26 half-year result
Here are the highlights from the first six months of Metcash’s FY26 to 31 October 2025:
- Group revenue increased 0.1% to $8.5 billion
- Group EBITDA (EBITDA explained) rose 2% to $367.2 million
- EBIT declined 2.4% to $240.2 million
- Underlying net profit after tax (NPAT) declined 5.9% to $126.7 million
- Reported net profit after tax increased 0.3% to $142.2 million
- Operating cashflow jumped 59.9% to $262.3 million
- Interim dividend per share of 8.5 cents
There was a mixed performance across the different divisions.
Segment breakdown
Metcash reported that including tobacco, total food sales declined 0.8%. Excluding tobacco sales, total food sales rose 7.2% to $4.5 billion, with growth in both supermarkets and foodservice & convenience.
The ASX share said the supermarkets maintained its competitive position in the face of increased price competition, particularly in the second quarter. Wholesale price inflation was 2.2% for the half. Superior Foods delivered 3.4% growth on an underlying basis, with the rate of growth increasing through the half.
Food EBITDA grew 9.8% and the EBIT rose 3.5% to $124.1 million.
In the liquor segment, total sales rose by 1.4% to $2.6 billion, reflecting market share gains in Australian packaged liquor and an acceleration in wholesale sales to on-premise customers.
Metcash said continued preference for convenience, quality and the value in independents’ differentiated offer helped drive sales growth in a more challenging market. But, liquor EBIT fell 11.4% to $43.5 million, reflecting one-off strategy costs of $1.5 million.
In the hardware and tools segment, total sales rose by 2.5% to $1.9 billion. Metcash said the pillar was “trading well in a more competitive market”. It said positive signs of improvement in the subdued trade market have continued into FY26, with the rate of growth accelerating in the second quarter.
Strong growth categories in hardware included building supplies, builders’ hardware and timber, while the strongest growth states were Queensland, Western Australia and South Australia. New South Wales and Victoria reportedly remain challenged.
EBITDA for Total Tools and the Hardware Group was flat at $145.6 million, reflecting improved sales performance, partly offset by one-off integration and strategy costs of $3.7 million, as well as retail margin pressure, though Total Tools retail margin improvement has been sustained in the FY26 first-half.
Outlook for the Metcash share price
The business reported that in the first four weeks of the second half of FY26, sales growth momentum (excluding tobacco) has continued into the second half with the rate of growth lifting in both supermarkets and Total Tools and broadly sustained in foodservice & convenience, hardware and liquor.
I think Metcash shares have a decent outlook with ongoing sales growth, but I’d also want to see pleasing profitable growth which didn’t come through in the HY26 result.
It’s one of the more compelling ASX dividend shares around, but I’m not expecting a lot of growth in the foreseeable future.
