We have gathered feedback from a range of retail industry contacts to gauge the initial read on Christmas trading. In short, sales trends have been good. It was a strong Black Friday month in November, early December was soft, but there was a noticeable improvement in sales in the last two weeks of December. Strongest feedback is for Chemist Warehouse and the furniture industry. The weakest feedback is in footwear and liquor, albeit Endeavour Group has won share. Woolworths had a strong December quarter, which largely reflects strikes from the pcp. Its underlying performance looks to be still lagging a little. The key risk for 1H26e will be gross margin. When we combine the sales and margin feedback, the EPS upside risk to consensus could come from Super Retail Group and Sigma. There is downside risk for JB Hi-Fi, Endeavour and Myer in our view.

Feedback on footwear category sales indicates soft trading conditions continue, making it one of the weakest retail categories. Analysis of Accent Group’s promotional discounting shows consistently deeper discounts since its AGM. We lower our sales expectations but lift our gross margin forecasts because the discounting has not deteriorated.

Australian retail sales rose 6.9% year-on-year in November 2025 according to ABS data. The shift of ABS data source does makes us cautious about the magnitude of the reported strength in sales. Even so, it does suggest another strong month in non-food. Household goods such as furniture, electronics and hardware, had the strongest growth up 10.6%. At-home food and liquor was weakest at 3.6% growth.

Nick Scali has provided a Christmas trading update that guides for ANZ sales to grow 10% to 12% in 1H26e. Group net profit after tax guidance has also been upgraded to between $37 and $39 million. The better sales performance in ANZ has driven the upgrade. We lift our revenue forecasts and gross margin expectations, reflecting the supportive backdrop domestically which we expect to slow post FY26e.

Treasury Wines’ new CEO Sam Fischer provided an update that resets the company’s inventory position in its key Chinese and US markets. The disclosure confirms concerns that distributors hold too much inventory. The underlying earnings of Treasury Wines has been overstated in FY24/FY25 and will be understated in FY26e/FY27e. The company will need to rebuild trust and transparency with investors in order to achieve a higher multiple.

Australian convenience retailers Ampol and Viva have an opportunity to roll out quick-service restaurant (QSR) counters across their high traffic sites and lift non-fuel margins to be in-line with US peers. Foodservice penetration in the US is an aspirational target for the domestic market, but Australian fuel retailers can grow gross profit per store by tapping into the circa 70% gross margins in QSR. QSR store rollout supports Ampol and Viva’s five-year outlook for growing non-fuel earnings, whilst elevated refiner margins are also supportive in the near-term.

Myer reported total sales growth of 3.0% for the first 19 weeks of trade for 1H26e. With Visible Alpha consensus expectations of 2.2% for 1H26e we expect upward revisions to consensus sales. Commentary around costs suggested expenses continue to be tightly managed. The stronger than expected growth came from lower gross margin categories such as concessions and homewares.

We have produced a chart pack about the outlook for the liquor industry. The primary debate is the structural vs cyclical components impacting the decline in consumption. While we see structural decline, we expect it to be in the order of -0.5% per capita, per annum, far lower than the circa -6% p.a in the past two years.  We are seeing signs of improving volumes in on-premise (pubs and restaurants).

Bapcor has provided yet another downgrade in a trading update, making it the third downgrade in 12 months. The company’s decision to stick with 2H26e guidance seems brave given the need to invest in price in its core Trade segment. The gearing is likely to rise to 3.3x on our forecasts, above its bank covenants of 3.0x. A capital raising of circa $200 million seems likely to us.

Premier Investments’ AGM trading update gave EBIT guidance for 1H26e of $120 million on a pre AASB-16 basis exclusive of significant items (UK losses for Peter Alexander). Visible Alpha consensus estimates appeared muddied by various factors causing uncertainty around earnings changes. Limited AGM detail provided suggests Peter Alexander continues to perform but sales and gross margins at Smiggle have continued to deteriorate.