Endeavour (ASX:EDV) share price rises following quarterly update

Shareholders were quietly raising a glass today.

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Two men standing on a balcony cheers their bottles.

Image source: Getty Images

The Endeavour Group Ltd (ASX: EDV) share price enjoyed a rather pleasant day on the ASX boards this Wednesday. Endeavour shares closed up a healthy 1.19% to $6.79. That’s quite a bit better than the broader S&P/ASX 200 Index (ASX: XJO), which finished with a 0.53% bump today.

So what’s going on with Endeavour – the owner of the popular bottle shop chains BWS and Dan Murphy’s – that might have prompted this spurt of outperformance?

Well, today saw Endeavour release a trading update covering the first quarter of the 2022 financial year (Q1 FY2022), covering 1 July to 30 September. This might have influenced investor sentiment on Endeavour shares today.

Endeavour sales shaken by lockdowns

So Endeavour reported some interesting metrics this morning. On the top line, the company announced that its total sales for the period came in at $2.936 billion, a 1.2% drop from the same quarter last year which brought in $2.971 billion in revenue. This comprised $2.654 billion in retail sales (down 0.2% from Q1 FY2021) and $282 million in hotels sales (down 9.9%).

Endeavour Group managing director and CEO, Steve Donohue laid the blame for this sharp drop in hotels revenue at the feet of the COVID-induced lockdowns. Here’s some of what he had to say:

COVID-19 continued to impact our trading environment during Q1 FY22. While Retail trading momentum was sustained across the start of the financial year, our Hotels business was significantly disrupted by the lockdowns in the key states of Victoria and New South Wales. Nationally, approximately 40% of our hotels were closed across the quarter and various trading restrictions were in place across the country.

In other news, Endeavour also reported that its online sales growth continues to rise. The company logged $305 million in online sales over the quarter, up 34.4% over Q1 FY2021’s $227 million.

The number of customers using Endeavour’s loyalty programs also continues to tick up. The Dan Murphy’s-based My Dan’s scheme now stands at 5.9 million members, up from last year’s 4.8 million. The BWS store chain also saw a 44.2% scan rate for the Everyday Rewards scheme, up from the previous metric of 42.4%.

Endeavour share price snapshot

Judging from today’s moves in the Endeavour share price, investors seem to have taken at least some heart from this trading update. At the current pricing, Endeavour shares have a market capitalisation of $12.01 billion and a dividend yield of 1.01%.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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