Endeavour Group has posted its third-quarter results, which show a decline in retail sales and uplift in hotel sales, which the group said reflects “the shift of customers returning to on-premise venues”.

Retail sales declined by 0.7 per cent (Easter-adjusted) to $2.32bn for the quarter, while hotel sales increased by 2.5 per cent (Easter-adjusted) to $405m. Endeavour Group Managing Director and CEO, Steve Donohue, said the business performed well over the third quarter, while also highlighting the $9m cost of the recent floods to the business.

“Hotels trading improved as COVID-19 related restrictions eased, and Retail sales were slightly lower than the equivalent period last year. We continued to build strong customer engagement, with both BWS and Dan Murphy’s recording improvements in customer metrics. These results are once again delivered within the context of an uncertain operating environment with extreme weather events, ongoing supply chain disruptions and growing inflationary pressures creating new challenges.

“COVID-19 continued to impact our operations. This was particularly evident at the beginning of the quarter, when consumer hesitancy reduced patronage in our Hotels, while team availability was a challenge in both businesses.”

He added: “Operating conditions were further impacted by recent floods and adverse weather across parts of New South Wales and Queensland. Team members from multiple sites have been personally impacted by the severe flooding and we are offering them additional support including financial assistance for property damage, providing vouchers for food and offering accommodation for displaced team members and their families at our hotels. Together with our customers, we have also raised over $800,000 to help communities impacted by the floods via charities including donation platform GIVIT.org.au and Red Cross.

“The flood events caused extensive damage to a small number of our stores and hotels in the quarter. Our Dan Murphy’s Lismore store was submerged in the flooding in the first week of March. In addition, 10 of our BWS stores as well as the Breakfast Creek Hotel (Brisbane) and Westower Tavern (Ballina) were significantly impacted. As a Group, we have suffered approximately $9m in damages in Q3 which reduced EBIT for the period. This includes direct costs as a result of the floods, such as clean up costs and asset write-offs, as well as an estimate of lost profits when stores and hotels were not able to operate. We are working through the insurance claim process and have not recognised an insurance recovery to date. We reopened the majority of our impacted sites by April, but five stores and one hotel remained fully or partially closed as at the end of Q3.

“In light of these challenges, it’s encouraging to see the sustained strength in our trading performance. I would like to thank all our team members for their incredible efforts and dedication through another period of volatility.”

Although retail sales declined, the group did see online sales grow, reaching annualized online sales of over $1bn with further investments in digital platforms and engagement.

Dan Murphy’s opened one store during the quarter, bringing the total store network to 258. In BWS, five stores were opened, 13 renewed and four closed, ending the quarter with 1411 stores.

In terms of hotels the group renewed eight venues and acquired two (The Empire Hotel and The Grand Tasman Hotel, both in South Australia), bringing its total number of hotels to 344 (including five managed clubs) at the end of the quarter.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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