Sigma Warehouse reported its 1Q26 sales at its AGM. Chemist Warehouse like-for-like sales were up 14.7% for the quarter, an acceleration on FY25 trends. The company highlighted elevated sales of weight-loss drugs like Ozempic as a big contributor. We estimate the contribution is anywhere from 3%-5% of the LFL growth. We expect LFL sales to settle back at 11% in 2Q26e and 9.0% in 2H26e.

We have made modest revisions to our retail sales forecasts. For FY26e, we forecast retail sales growth of 4.0% (prev 3.9%) and for FY27e 4.1% growth (unchanged). Non-food retail spending has been solid in the past six months and the trends are likely to continue into Christmas this year. However, we may see some shift in category performance in the new year as household goods slow, while fashion and takeaway food sales improve. Our upswing in retail sales is muted, which is a function of slowing household income growth and a low savings rates. We continue to monitor house prices closely as a source of upside risk if the wealth effect stimulates the use of previously stored-up savings.

Bapcor’s trading update revealed ongoing sales declines and a sharp drop in profit margins for 1H26e. The company’s discovery of poor business practices highlights the complexity in the group and the need to simplify. Based on current trends, sales should stabilise in 2H26e and cost savings are likely to trigger a margin recovery. On our estimates gearing will stay below covenant levels and free cash flow should help reduce debt.

The festive season will ramp-up for retailers in the next few weeks. The consumers’ embrace of Black Friday has resulted in November sales now representing a bigger share of the annual calendar in Australia compared with the US, UK and NZ. The timing and high base makes it difficult to see a strong festive sales period in 2025. We forecast non-food sales to rise 4.0%, a slight dip on recent trends. While the sales backdrop will be decent, the risk is retailers discount earlier this year given higher inventory for some. We highlight Accent Group and Lovisa as retailers with elevated inventory levels.

The downgrade by Treasury Wines to its FY26e outlook will raise questions about the path for Penfolds, quality of Americas earnings and changes that pending CEO Sam Fischer may implement. The drop in Penfolds growth is understandable given “crackdowns” by the Chinese government on official banqueting. The deeper concern is the reset in Americas luxury margins where the contribution outside DAOU looks small.

Australian retail sales only rose 3.1% in August 2025, a slowdown from the 5% trendline seen in the previous three months. The slowdown was broad-based, albeit café & restaurant spending remained strong at 6.4% growth. While the slowdown may raise some concern, we see the sustainable trend level around 4% growth and hence a softer month for August and September is likely. Consumers are bound to wait till Black Friday to spend up again.

This chart pack provides subscribers with insights about the retail operating environment and outlook for sales, gross margins and operating leverage. The chart pack has been compiled post the FY25 reporting season across the retail market providing fresh insights about the sector.

Premier Investments reported FY25 Retail EBIT of $183 million, down 24%. FY25 sales performance was divergent for Peter Alexander and Smiggle with the same trend continuing it is trading update. We downgrade EPS by 3.4% and 4.5% in FY26e and FY27e given store closures and continued sales declines at Smiggle. We have also lowered our gross margin given commentary about a competitive market. Cost discipline remains a theme at Premier. Earnings growth will be delivered in FY26e but beyond that success will be determined by a recovery at Smiggle and the success of the Peter Alexander expansion to the UK.

Myer reported an FY25 EBIT of $140 million, down 14% and inclusive of six-months from Apparel Brand. On a pro-forma basis Myer Group EBIT for FY25 was $174 million, down 30%. Sales trends are showing modest improvement. We expect flat gross margins from continued promotional pressure. We forecast cost growth of 3.6% to result in EBIT down 2% for FY26e (on a pro-forma basis). Shareholders will need patience. Myer will need to deliver on synergies which are largely expected in FY27e.

dusk reported FY25 sales of $137 million, up 8.7%. Like-for-like (LFL) sales growth of 7.1% meant a 2H25 LFL sales growth of 3.6%. The trading update for the first eight weeks saw total sales down 1.5%, cycling 16% growth in same period last year. We reference the two-year stack in our forecast for LFL sales growth of 4.2% for FY26e. With limited store openings and growth in LFL sales we forecast FY26e revenue forecasts of $144 million, up 4.9%.