Sigma’s trading update revealed a small, but notable improvement in sales trends and an entry into the UK through a joint venture. Improved sales trends are a positive sign but the driver still appears to be GLP-1 drugs, resulting in margin dilution. The UK joint venture is small with five stores to be trialled in the Chemist Warehouse format in London.

Accent Group strategy day focused on long term growth targets for 2030 which are driven by the rollout of Sports Direct, cost out initiatives and an assumed improvement in like-for-like sales growth beyond FY27e. We are cautious on the ability to reach the longer term store count goals with more than a hundred stores in the current network under review. An improvement in like-for-like sales is predicated on the continued strength of performing brands and the recovery of brands that have been out of favour in recent years.

Temple & Webster’s trading update highlights a shift in focus from high sales growth to profitability. This pivot has driven a much weaker sales outcome. The strategy pivot may be temporary but along with a change in CEO creates uncertainty.

We have updated our store forecasts to correct for our store scrape analysis that had included clearance stores. Nick Scali presents stores on an ex-clearance store basis which were erroneously reflected in our previous report. Having corrected our store assumptions, we still see sales growth for the Nick Scali group driven by stores openings and the UK. The store growth opportunity for Nick Scali both domestically and internationally is attractive.

The Federal Budget for FY27e is positioned as reform and addressing inter-generational equity for taxpayers. However, the implications over the next 1-2 years on consumers and the retail sector is mild. We estimate less than 0.2% boost to household income over FY27e to FY29e, which pales into insignificance compared with the 1.8% boost to households from government spending in FY25. The changes to tax deductions on investment properties will take many years to shift housing churn and house prices given existing investors are grandfathered. The path of retail sales for the next three years will be more dependent on the interest rate outlook and employment growth. We expect a slowdown in retail sales to be most evident in the July-December 2026 period as income growth slows.

Sigma’s trading update revealed a small, but notable improvement in sales trends and an entry into the UK through a joint venture. Improved sales trends appear to be driven by GLP-1 drugs, resulting in margin dilution. The UK joint venture is small with five stores to be trialled in the Chemist Warehouse format in London. While Chemist Warehouse has impressive growth, expectations are high and the patience of company management may be higher than the patience of the market.

Super Retail Group’s May 2026 trading update shows a meaningful slowdown in sales, particularly in BCF and Supercheap Auto. These two businesses are more directly impacted by the spike in petrol and diesel prices. We expect soft sales trends to persist into FY27e, but also see gross margin gains from a stronger Australian dollar, self-help in Rebel and distribution centre benefits flowing through to earnings. We expect to hear more on these topics at Super Retail Group’s strategy day on 11 June 2026.

Inghams will hold a strategy day on 11 May 2026. The last strategy day in November 2023 failed to hit the mark given the loss of Woolworths volumes highlighted its vulnerability. On this occasion, we expect Inghams to be, rightly, less ambitious and more focused on improved execution. EBITDA margins are likely to land at 6.0% in FY26e, flat on the modest level achieved in FY23. A return to decent volume growth and improved margins is needed.

Endeavour Group’s 3Q26 trading update revealed slower sales trends with an enticement of $100 million in cost savings in FY27e as a benefit. The reality is that sales trends are insufficient for cost savings to drop through to earnings. We expect Endeavour to continue gaining market share given First Choice could close, but a recovery in market growth is more important in our view, which may take time as retail liquor reverts to slight per capita volume declines.

Accent Group has downgraded FY26e guidance. The downgrade to reported EBIT of 8% at the mid-point is attributed to geopolitical unrest. A cost out programme for FY27e and an ASIC investigation into staff share transactions were announced. Accent Group sentiment is lower as a result of the post Covid slump in earnings, management uncertainty and risk of execution for the Sports Direct roll out.