Endeavour’s strategy unveil focused very much on retail fundamentals and lacked quantifiable detail.  The emphasis on sales growth is sensible given Endeavour Retail has lost 5% of market share over five years. There is upside in selling data to suppliers and better buying margins too. The $300 million cost savings will be partly offset by cost inflation. Management incentives attached to the strategy will be crucial. Previous iterations focus on sales, EBIT and working capital, along with ROFE and EPS. We expect the same focus going forward. We forecast capex to hover near $500 million as more is spent on hotels, which is consistent with a lower dividend payout ratio.

Endeavour Group will hold a strategy day on 27 May 2026. While a good opportunity to hear about its focus and meet new management, we expect the strategic pillars to be about improving its price position in Dan Murphy’s and cutting costs, both largely known topics. We wonder about the future of Pinnacle Drinks and see upside from a shift in range towards RTDs. Hotels refurbishments will be a feature with a higher frequency needed. We think the strategy day is unlikely to reveal much new, and puts the focus on a) liquor industry demand growth and b) the execution of its strategy.

Coles reported 3Q26 sales growth of 3.1%. While 3Q26 sales lagged its rival, Coles Supermarket track-record has been superior to rivals and the market over the past three years. Its Supermarket growth rate is likely to converge with Woolworths over the next nine months in our view. In Liquor, Coles rebranding has not delivered any earnings improvement and former First Choice stores could be shut down in our view. Coles looks to have enough flexibility to manage the fuel price and inflationary pressures near-term. The more important debate will be the ability of the two major supermarkets to ensure ongoing healthy rates of sales growth, which should occur as food inflation accelerates over the next year.

Endeavour Group’s 1H26 result release revealed ongoing weakness in Retail liquor sales and further gross margin pressure for 2H26e. Gross margin investment that commenced in September 2025 needs to flow through and should start to boost sales late in FY26e as marketing is ramped up. However, EBIT recovery will only begin in FY27e. The Hotel segment is seeing good momentum from site renewals and more will be done over the next year. However, it is grappling with higher cost growth.

Coles Group reported 2.5% sales growth and 10.2% EBIT growth in 1H26. The key driver of earnings was higher gross profit margins, which should persist in 2H26e, but then fade in future years. Cost savings and productivity benefits from its supply chain investment are also boosting profit margins. Coles sales trends have slowed highlighting the Woolworths DC strike benefit was transitory. However, its growth still outstripped Woolworths on a two-year basis. Coles has de-rated over the past month and its sales momentum is likely to converge with Woolworths over the next 3-6 months.

Endeavour Group provided a trading update that revealed gross margin pressure on its Retail segment earnings for 1H26. The release also provided the first indications about new CEO Jayne Hrdlicka’s likely strategic direction. Ms Hrdlicka will clearly focus on price leadership and driving more sales through its stores. There is also scope to cut overheads and unwind the arrangements with Woolworths over time. We have lowered our EPS by 5% in FY26e and 1% in FY27e. We retain a Buy rating on Endeavour and expect the shares to re-rate once there is clarity from the refreshed strategy in May or June 2026.

Endeavour Group reported 1Q26 sales down 0.3%.  The sales dynamic remains broadly consistent with declines in Retail liquor volumes, but growth in Hotel sales. Endeavour’s commentary suggests gross margin risks are building as it invests in sharper pricing in order to improve sales trends in its retail stores. We expect EBIT to drop by 5% in Retail in FY26e, despite cost savings. The Hotel business should have a better financial year given sales growth, but costs are elevated.

Endeavour Group reported a weak FY25 result with EBIT down 12%. There were mixed fortunes with Retail earnings down and Hotels up.  Recent sales trends suggest a similar dynamic in FY26e. However, we see more cost savings and less headwinds from its One Endeavour restructuring costs. We make EPS downgrades of 5% in both FY26e and FY27e given lower Retail sales and some gross margin pressure. Endeavour’s balance sheet has high gearing. When combined with its management changeover in January 2026, the risks are growing that an equity raising is used to improve its balance sheet and provide the capital to turnaround the business.

Coles reported FY25 EBIT up 7.5% on a 52-week basis. Growth was stronger in Supermarkets, partly offset declines in Liquor and higher overheads. Coles has had a strong start to FY26e sales in Supermarkets, which we largely attribute to market share gains. The combination of better sales, one-off costs from last year rolling off and supply chain savings should support group EBIT growth of 12.5% in FY26e. We expect growth to then step down to 5%-7% in FY27e and beyond.

Endeavour Group’s announcement that Executive Chairman, Ari Mervis, will step down naturally raises many questions. However, one question it helps answer is that near-term sales and earnings look like they are stabilising. The teleconference call made it clear that the strategy “refresh” is just the beginning. As a result, there could still be substantial change in Endeavour and earnings risk under new CEO Jayne Hrdlicka who starts in January 2026.