The Endeavour Group Ltd (ASX: EDV) share price is in the green this morning after the company posted a trading update for the first quarter of financial year 2022.
The liquor and hotel giant's shares are currently trading at $6.97, 1.46% higher than their previous close.
That's compared to the S&P/ASX 200 Index (ASX: XJO)'s 1.32% tumble at the time of writing.
Endeavour share price lifts as quarterly sales reach $3 billion
Here are the key takeaways from the Woolworths Group Ltd (ASX: WOW) spin-off's unaudited sales for the 14 weeks ended 2 October:
- Retail sales came in at $2.49 billion – a 6.2% fall on the same quarter of last financial year
- Hotels sales lifted to $538 million – a 90.8% improvement
- Total sales increased 3.1% to around $3 billion
- On a three-year compound annual growth rate (CAGR), the company's retail sales lifted 4.4%
- Its hotels sales also increased 4.8% on a three-year CAGR basis.
Endeavour's sales continued to grow on a multi-year basis in the first quarter as its hotel and retail portfolio cycles through previous COVID-19 lockdowns.
The first quarter of financial year 2022 saw key population centres in Victoria and New South Wales impacted by lockdowns and restrictions. That negatively impacted the company's hotels segment, with 40% of its hotels closed in the prior comparable period. However, it saw sales at its retail portfolio – housing brands such as Dan Murphy's and BWS – surge.
Compared to the same period of financial year 2020 (pre-pandemic), Endeavour's hotel and retail businesses saw sales increase 15% and 13.9% respectively last quarter.
What else happened in Q1?
The Endeavour share price fell 7.5% over the first quarter of financial year 2022 amid rising inflation and interest rates.
It also plummeted 12.3% on the back of the company's full-year earnings, released in August.
The company added one Dan Murphy's store and seven new BWS stores to its portfolio last quarter. It also acquired three hotels, leaving it boasting 347 hotels at the end of the quarter.
What did management say?
Endeavour managing director and CEO Steve Donohue commented on the results driving the company's share price today, saying:
Our hotels are thriving, as Australians embrace both large and small social occasions after years of COVID-19 disruption.
There has been a rebound across all hospitality categories, with bars, food, gaming, and accommodation all performing strongly. Live entertainment is also becoming a feature of our business again, with music fans enjoying a range of sold-out gigs across our hotels.
We've also seen consistent, strong sales in retail. Our year-on-year comparison shows a predictable decline as we cycle the unique spikes in demand created by COVID-19 restrictions … This cycling impact is easing as we head into the second quarter.
What's next?
The company is gearing up for a busy holiday period, set to mark the first restriction-free festive season in three years.
Donohue noted function bookings are already strong in the company's hotels and its retail brands will offer a range of products to meet various tastes, trends, and price points over the holiday season.
The company will also host its annual general meeting (AGM) tomorrow.
Endeavour share price snapshot
The Endeavour share price has outperformed the broader market so far this year.
The stock has gained 2% since the start of 2022. It's also trading 1% higher than it was this time last year.
Meanwhile, the ASX 200 has fallen 11% year to date and 8% over the last 12 months.
