Lovisa’s comparable sales growth for the start to FY27e of 3% puts it in the accelerating category of Australian listed retailers. Store closures increased in FY26 as management shut underperforming stores, a dynamic we expect to continue in FY27e. Nonetheless, Lovisa’s store rollout is a key driver of sales growth. Lovisa’s store network potential will see stores nearly double over the next decade with the potential to reach 3,000+ stores over time.

Now that reporting season is over for Australian retail, we have finalised the themes and issues observed during FY26. The strength of sales trends in FY26 has been met with weaker trading updates going into FY27e as the consumer faces a number of headwinds to end 2026 – interest rates hikes, falling house prices and higher petrol prices add risk to the retail outlook. The impacts are likely to be more significant in the 1H27e fiscal period and more painful in housing-related retail categories and takeaway food.

Lovisa reported FY26 EBIT of $158 million, up 14%. Sales grew 18% in FY26 with second half sales up 12%. Gross margin at 82.6% improved 60bp. We lower our sales forecasts on lower store numbers but improved comparable sales, with comp sales for the first eight weeks up 3%. We lift gross margin and lower costs. While there is a strong pipeline of store openings, the store network will need to be optimised further and competitive threats are increasing.

Super Retail Group reported a decline in FY26 EBIT of 3%, but gross margin improvement combined with tight cost control bodes well for EBIT growth in FY27e. We forecast EBIT growth of 6% for the year ahead, with higher gross margins the key driver. Rebel is improving its inventory and promotional management and the higher Australian dollar will lower the cost of goods. While we see an improvement in EBIT, the economic backdrop will be a headwind.

Viva reported a strong 1H26 EBITDA increase of 154%, which reflects much higher refining margins and the Liberty acquisition. The Convenience business may have slippage in 2H26e EBITDA given higher cost inflation and weaker retail fuel margins. The refining backdrop remains very supportive for 2H26e and even into FY27e.

dusk reported sales growth of 14% in 2H26 and full year growth of 8.4%. Gross margins improved 279bp in 2H26 driven by promotional discipline, currency benefits and improved logistics.

Accent Group reported EBIT of $83 million in line with guidance and Visible Alpha consensus. Like-for-like sales in the second half was down 2% and continued in the trading update for the first seven weeks of 1H27e. Gross margin improved in 2H26 on 1H26. We lower our sales forecasts but increased our gross margin expectations.

Nick Scali delivered FY26 EBIT of $125 million, up 18%. Sales growth underwhelmed with a weak second half. Gross margin improved in FY26 to 65.6% up 207bp. The flat trading update for written sales orders signalled an improvement in momentum but it might be temporary. We have lowered our sales forecasts on our expectations of a tougher environment but lifted our gross margin expectations. We need to see more evidence of improving sales before getting positive on the sales recovery.

Woolworths is undertaking a program called Customer Offer Reset (COR), which will reduce its branded range and shift more products to an every day low pricing (EDLP) proposition called Lower Shelf Price (LSP). The program will show up on shelf shortly and impact the next two years. COR and LSP should be positive for sales and earnings, but it does depend on the competitor response. These programs demonstrate a sharper focus by Woolworths on execution and price trust. While not solely related to COR and LSP, we expect Woolworths to sustain above market (and Coles) growth over the next year and EBIT margin expansion.

Frasers Group has announced a full takeover offer for Accent Group with no premium at A$0.65. Frasers Group has used the strategy in the past, building up a stake and launching an opportunistic bid with varying success. The offer represents a 3.3x EV/EBITDA multiple (FY26e). Frasers may lift the bid but has exercised patience in the past. The board will say that the offer undervalues the company, holding out for an improved offer in our view. We weight three scenarios at an equal chance of occurring: a full takeover going ahead at a premium to the current offer, a status quo scenario and a Sports Direct agreement termination.