Australia's Endeavour hits record low as group sales growth misses estimates

Endeavour

11/11/2024 24:33

By Rajasik  Mukherjee
       Nov 11 (Reuters) - Shares of Australia's Endeavour Group
 EDV.AX  fell to a record low on Monday, after the pub operator
posted first-quarter group sales growth below market estimates,
while a lack of clarity around its CEO succession also left
investors disappointed.
    The stock declined as much as 5.9% to A$4.450 in its biggest
intraday percentage loss since Aug. 26, while the benchmark
index  .AXJO  was down 0.3%.  
    Endeavour, which was once the country's biggest pub owner,
reported group sales growth of 0.5% to about A$3.11 billion
($2.04 billion) for the 14 weeks to Oct. 6, below a Visible
Alpha consensus of 1.9%, compiled by Citi.
    The company said cost-of-living pressures curbed consumer
spending, which further squeezed its top line. 
    Endeavour flagged further headwinds for its retail division
after reporting flat sales growth as momentum slowed in
September. 
    "In the near term, softer sales and a lower margin sales
mix, resulting from both a higher percentage of sales on
promotion and consumer downtrading, are expected to impact
retail profitability," MD and CEO Steve Donohue said in a
statement.
    Achieving retail sales growth in the second quarter will be
challenging, Jefferies analysts said in a note, adding that cost
inflation remained a headwind for both the retail and hotel
divisions.
    Citi analysts flagged a lack of update on Endeavour's CEO
transition. 
    Current CEO Donohue had laid out his intention in September
to leave the role. The firm had, however, said Donohue would
continue as CEO until his successor was found.
    "Given the weakness in trading conditions, combined with
uncertainty around the strategic direction of the group
following Donohue's recent resignation, we expect the stock to
be weak today," Citi analysts said in a note.

($1 = 1.5191 Australian dollars)

 (Reporting by Rajasik  Mukherjee; Editing by Subhranshu Sahu)
 ((Rajasik.Mukherjee@thomsonreuters.com;))