Endeavour Group’s 1Q25 result showed weaker retail sales trends and indications that gross margins are coming under pressure. The company said that Retail segment EBIT margins will fall by 50-100bp in 1H25e. We expect weak sales trends to persist a little longer, but the problem isn’t structural. The company has increased discounting to improve sales, which has hurt margins, but is yet to help sales.

City Chic reported an FY24 pre-AASB 16 EBITDA loss of $19 million, an $8 million smaller loss than in FY23. This was a beat to the guidance of -$22 million provided at the time of the capital raising in June 2024. City Chic’s trading update showed positive comparable sales up 9.9% and further, provided revenue guidance of $142 to $160 million for FY25e.

Inghams provided a further trading update about its second-half of FY22e. The results will be “seriously” impacted by Omicron, floods and input cost pressures. We forecast FY22e EBITDA of $135 million (pre AASB-16). 2H22e EBITDA is down 68%. While FY22e is tough, there should be a rebound in FY23e as earnings normalise. However, our EBITDA does not recover to pre COVID-19 levels because higher transport and feed costs could weigh on earnings for longer.