The Endeavour Group Ltd (ASX: EDV) share price is down more than 3% after reporting its FY26 half-year result.
Endeavour is the owner of liquor brands Dan Murphy’s and BWS. It also has around 350 hotels across Australia.
Endeavour HY26 result
Here are some of the main highlights for the result for the six months to 4 January 2026:
- Group sales increased 0.9% to $6.7 billion
- Underlying EBIT (EBIT explained) fell 5.4% to $563 million
- Underlying net profit after tax (NPAT) declined by 6.7% to $278 million
- Statutory net profit dropped 17.1% to $247 million
- Interim dividend per share declined by 13.6% to $0.108
Liquor performance
Both segments experienced revenue growth, though hotels performed stronger than the liquor segment.
In liquor, total retail sales increased 0.2% to $5.5 billion, with sales ‘momentum’ improving in the second quarter. The HY26 first half sales for Dan Murphy’s and BWS grew by 0.7% to $5.4 billion.
Endeavour noted that since the start of September, Dan Murphy’s and BWS together have delivered four consecutive months of sales growth, reflecting its “commitment to price leadership as a fundamental part of the customer experience, particularly in Dan Murphy’s”.
In the second quarter of FY26, Dan Murphy’s and BWS sales grew by a combined 2.2% (or 0.6% adjusting for an estimated $45 million sales impact of supply chain disruption in the prior corresponding period).
December 2025 was the strongest ever sales month thanks to Dan Murphy’s trading in both the lead up to Christmas and New Year’s Eve. Christmas Eve set a new daily sales record.
Online sales increased to 11.3% of the combined Dan Murphy’s and BWS sales, reflecting both a “highly competitive promotional environment” and the price leadership focus. Online sales rose 35.1% to $608 million, with the ‘ultra-convenience’ channel delivering the strongest growth.
The liquor retail’s underlying cost of doing business (CODB) was flat year on year, reflecting “ongoing cost optimisation which mitigated elevated inflation”.
The retail segment delivered underlying EBIT of $327 million.
Hotels performance
The company said that the hotels sales increased by 4.4% to $1.2 billion.
The sales growth in the second quarter was driven by an increase in gaming, strong results from refurbished venues and positive trends in food and bar transactions.
Endeavour’s hotel segment generated underlying EBIT of $275 million.
Should it split up its businesses?
Endeavour said it intends to maintain its combined structure as this is the best way to make money for investors.
As part of the strategy, the company noted how it plans to improve the business for customers and grow earnings.
In liquor retail, it wants to restore unrivalled price leadership at Dan Murphy’s, clarify the role that the two liquor businesses plays for customers, and right size the product ranging.
In hotels, it wants to accelerate its investment in the network, including venue renewals and electronic gaming machines, enable both scale benefits and local autonomy to compete, and build on its pub+ loyalty proposition.
It also wants to simplify and drive costs out of the business, deliver technology separation from Woolworths Group Ltd (ASX: WOW), and optimise the asset base.
Outlook for the Endeavour share price
The business revealed sales growth in the second half of FY26 for 1.3% for retail liquor and 4.5% for hotels.
Endeavour said that retail is continuing to gain market share in a competitive liquor market.
However, sales growth in both retail and hotels moderated in February compared to January.
It noted that the retail gross margin will reflect its continued focus on price leadership.
It’s expecting to increase its Dan Murphy’s store network by three and reduce the BWS store count by three during the second half.
The hotel segment is looking to complete at least 14 renewals and install at least 800 new electronic gaming machines in the second half.
Putting aside any negative thoughts on liquor retailing, the business now seems very cheap after the Endeavour share price dropped more than 50% from 2022. Its sales continue to grow, which is a positive.
It’s not something I’m looking to buy one for my own portfolio, but it’s one of the ASX dividend shares that could be undervalued if it can turn the direction of its net profit around. The hotel renewals could help with that, with strong sales growth.
