Inghams reported 1H25 poultry volumes down 2.7% and EBITDA dropped 10%. Price realisation was good and Inghams had feed cost reductions and admin cost savings to partly offset the volume decline. Prices are 19% higher than three years ago. This is important as it signals that new contract wins to replace lost volume with Woolworths has not been done at irrational prices.

Endeavour’s share price has dropped 10% in the past quarter. Our take is the share market is concerned about the outlook for liquor industry demand and the transition to a new CEO. We address the liquor industry outlook in this report and find that the weakness in sales is more a function of the COVID-19 spike in demand than a structural concern. We expect retail liquor sales to improve meaningfully by June 2025 and support better earnings for Endeavour. 

Inghams reported FY24 EBITDA of $240 million pre AASB-16, growth of 29% (on 52-week basis). While the result was good, second-half earnings growth was soft and the company revealed that Woolworths will cut back volumes with Inghams to diversify its supplier risk. We expect Woolworths’ FY25e volumes will fall 10%-20% with Inghams. Lower feed costs are a strong tailwind for FY25e and should offset much of the headwind from lower Woolworths volumes.

Domino’s reported network sales down 4% and EBIT down 21% in 1H23. The worrying sign near-term is weak same store sales growth (SSSg) trends persisted into 2H23e and the company has seen a volume reaction to its price rises, limiting its much-needed improvement in system profitability. Our primary concern is the deterioration of franchisee profitability which is trending 30% below recent peaks and at a level that will discourage new store openings.