Australia’s biggest alcohol retailer has reported a drop in profit after subdued sales amid ongoing cost of living pressures, particularly in poorer outer suburban areas, as it waits for new leadership after recent management turmoil.
Dan Murphy’s and BWS owner Endeavour Group on Monday said it would cut its dividend after making just $426 million in net profit after tax in the 52 weeks to June 29, down 15.8 per cent from 2023/24.
Beyond the poor financial showing there have been leadership challenges since Steve Donohue announced his retirement in 2024 after 30 years with the company.
Former chairman Ari Mervis had been serving temporarily as executive chairman but quit effective immediately three weeks ago, citing disagreements with the board regarding strategy.
Former Virgin Australia and a2 Milk CEO Jayne Hrdlicka is set to take over as chief executive and managing director on January 1, pending receipt of regulatory approvals.
For now she’s consulting to the board the equivalent of two days a week.
“As a board, we recognise that F25 was a challenging year, marked by movements within both the Executive Leadership Team and the Board,” said chairman Duncan Makeig.
The company is also undertaking a portfolio-wide review of its business after the sub-par year that reportedly could result in a split-up of its pubs business from its liquor stores.
Endeavour Group said that in 2024/25, retail sales fell by 1.2 per cent to $10 billion, due to the softer consumer spending in retail liquor as well as the industrial action by Woolworths warehouse workers late last year.
The strike prevented stock from reaching Endeavour’s stores in the crucial lead-up to Christmas, costing Endeavour an estimated $40 million to $50 million in lost sales.
The company’s 1444 BWS and 278 Dan Murphy’s liquor stores saw solid trading around key reasons to celebrate, including Christmas, New Year and Easter, but outside of those areas consumer spending remained subdued, the group said.
That’s a trend that has continued into the new financial year, with Dan Murphy’s and BWS sales down 1.3 per cent in its first seven weeks, compared to the same period a year ago.