Endeavour Group, which owns Dan Murphy’s and BWS, is pushing ahead with a three-year cost reduction drive targeting $100 million in savings by FY27, unsettling investors despite a 1.2% lift in group sales so far in the FY26 second half.
Shares fell 7.6% to $3.16 by 11:05am AEST after the company confirmed support office roles will go as part of the plan.
An analyst at RBC Capital Markets said third-quarter sales beat expectations and raised FY27 earnings forecasts on the back of the cost savings, yet still described the overall trading update as mixed to slightly softer.
RBC keeps a sector perform rating on Endeavour with a $4 price target.
Group numbers show hotels doing the heavy lifting with sales up 3.7% over the first 16 weeks of the second half, while the retail division managed a smaller 0.7% increase.
Endeavour expects elevated fuel and freight prices to add between $6 million and $8 million to second-half supply chain costs.
Management is targeting store cost optimisation, labour efficiencies, more centralised administration, procurement savings and a reduction in headcount at its support office to hit the $100 million cost target.
Sales momentum in hotels has already moderated late in the third quarter as cost-of-living pressures bite, so the group is attacking its expense base now.
Operationally, Endeavour is also dealing with external shocks including disruption and higher transport costs linked to the conflict in the Middle East.
The company is working to limit supply interruptions and blunt the impact of higher fuel and freight charges on margins.
Retail sales still track positive despite weaker consumer sentiment and broader macroeconomic uncertainty, which management cites as evidence of resilient demand for its liquor chains.
Hotels are viewed internally as having defensive revenue characteristics, backed by a history of strong cash generation through economic cycles.
Endeavour faces modest top-line growth, rising operating costs and investors demanding earnings protection.
The share price reaction suggests the market focuses more on near-term cost pressures and restructuring risks than on the promised FY27 savings.
Analysts describe the strategy as necessary but not transformative, with the outlook only slightly improved once cost cuts are factored in.
Investor sentiment now rests on whether Endeavour can deliver the flagged savings without harming growth in its hotel and retail networks.
