Sigma only has 18 months of history as a merged business and therefore an understanding of its earnings drivers is still emerging. While the growth prospects for Chemist Warehouse domestically and internationally are strong, Sigma is ultimately a wholesaler and franchisor. Modest leverage from converting revenue growth into EBIT growth is a function of its revenue mix. Close to 40% of Australian revenue is PBS prescriptions, where margins are thin. We expect revenue growth of 8% to 16% p.a and operating leverage of 1.0-1.3x over the next three years. This translates to EPS growth CAGR of 15.8% over three years but puts a greater emphasis on revenue to drive EPS.

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.

Domino’s reported network sales down 7% and EBIT up 1% in FY26. The company is aggressively pursuing cost savings and lower discounting across its network. We expect modest EBIT growth in FY27e, however the quality of earnings growth is lower with EBITDA declining. The shape of earnings revisions shows the outcome of a lower operating cost base and shrinking store network in the near-term, but bigger downgrades in later years from underinvestment in marketing to chase profitable growth.

Sigma reported FY26 EBIT sales up 16% and EBIT up 21% on a normalised basis. Sales trends were slightly slower in 2H26 and we expect 10% to 11% Australian like-for-like (LFL) sales growth in FY27e. For a company with double-digit sales growth, operating leverage is low. Sigma had 43bp of EBIT margin expansion in FY26, with lower gross margins partially offsetting fixed cost leverage. We forecast 43bp of margin expansion again in FY27e. We expect a bigger contribution from International earnings with faster store openings. International EBIT could double in two years.

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.

Chemist Warehouse has sustained double-digit comparable sales growth for three consecutive years. The retailer has won market share from other pharmacies and Coles and Woolworths. Chemist Warehouse advantages are its pricing tactics and breadth of range. While Coles and Woolworths are unlikely to fix their ranging issue, they may adjust pricing tactics. Chemist Warehouse is cheaper than the supermarkets when comparing shelf prices to Chemist Warehouse’ standard price, but much less so when comparing promotional prices. The risk to Chemist Warehouse is that Coles and Woolworths use everyday low pricing tactics to improve their relative pricing to Chemist Warehouse. They have begun lowering prices on high profile products and more will come over the next 12 months. We may see a slowdown in Chemist Warehouse sales growth towards single digits over the next year.

Domino’s provided a trading update that shows steady profits and improved franchisee profitability for FY26e. The missing link was that sales trends deteriorated and more stores will be closed. We expect same store sales to decline 1.1% in FY27e, on top of the 4.1% fall in FY26. While store closures and cost savings will help EBIT, cost inflation and declining sales largely offset.

GyG’s decision to exit the US is sooner than expected but a logical step given weak sales productivity in that market. We lift our EPS forecasts by 4% in FY26e and 37% in FY27e. As an Australian store rollout and margin expansion proposition, GyG’s prospects look good. The company’s affirmation of $85 million in Australian EBITDA suggests an EBITDA margin of 6.2% for FY26e. This is a rise of 60bp and we see 40-60bp annual margin expansion over the next three years.

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.

Lovisa’s global expansion has added operational complexity including currency changes which we have mitigated by forecasting on a constant currency basis. We have lowered our comparable sales forecasts and our ANZ store count estimates. Lovisa has de-rated as consumer sentiment and discretionary spend is impacted by geopolitical tensions. Competition domestically, global tensions and Jewells expansion remain key risks.