Dan Murphy’s owner hopes for bumper Christmas as Aussies return to the pub
Endeavour Drinks managing director Steve Donohue. Photo: Eamon Gallagher

Dan Murphy’s owner hopes for bumper Christmas as Aussies return to the pub

The boss of Dan Murphy’s operator Endeavour Group is hoping for one of the company’s strongest Christmas seasons ever this year, with gatherings at the pub making up for volatile retail market conditions.

“It will be as big a Christmas as we’ve ever had, hopefully, given the way that people are feeling about the excitement around social reconnection,” Steve Donohue told The Sydney Morning Herald and The Age on Tuesday.

Investors felt little cheer on Tuesday afternoon however after the drinks giant reported its first full-year result as a standalone company following its spin-off from Woolworths. The stock slumped 12.1 per cent after Endeavour posted an 11.2 per cent profit jump, missing market expectations.

Donohue acknowledged the results came in the face of volatile trading conditions, including COVID lockdowns, supply chain disruptions and staff shortages throughout the year.

Despite this, he said the bounce-back at the company’s hotels business has been robust, and its bottle shops have performed strongly, with Australians still revelling in the freedom of catching up with friends after two years of virus-related restrictions.

’The macro trend of people getting back to normal and reconnecting plays forward, I think, in this half,” he said.

While predictions of a further consumer spending slowdown are playing on retailers’ minds, Endeavour remains upbeat about the festive outlook. Early indications of spending in the lead-up to Father’s Day, one of the company’s busiest trading periods, have also been “pretty positive”, Donohue said.

There are signs that spending at its bottle shops is moderating compared to the surge in sales seen during the COVID lockdowns in 2022, however.

Endeavour’s trading figures for the first seven weeks of the 2023 financial year show that retail drinks sales are down 6.7 per cent on 2022, though still ahead by 12.7 per cent compared with 2020.


Meanwhile, the company’s hotels business continues to rocket along now that venues have reopened, with sales up 75 per cent in the first weeks of 2023 compared with last year, when restrictions were in place, and up 13.4 per cent on 2020.

Donohue noted there were challenges on the horizon, with a labour shortage making it difficult to predict wage costs into the future – though the company says it has the agility to work through these uncertainties.

“Wages is going to experience not dissimilar degrees of volatility as freight costs, fuel costs, and a whole variety of factors,” Donohue said.

Jarden analysts said Endeavour’s first result was in line with its expectations, but the divisional numbers surprised as the hotels business was performing ahead of predictions, while retail was slightly behind.

“The result [is] ok in our view, but [we] expect there will be questions if [it] is strong enough” to sustain the company’s recent share price gains, the Jarden equities team said in a note to clients, predicting analysts consensus forecasts would likely be reduced for the current year.

Endeavour shares were 11.4 per cent lower at $7.32 in mid-afternoon trade. The company will pay a final dividend of 7.7 cents, up 10 per cent, on September 16, bringing its full-year payout to 20.2 cents a share.