Domino’s reported FY25 EBIT of $198 million, down 5%. The result showed very weak sales trends across all geographies and EBIT margin declines for Asia are a concern given the significant store closures should have improved profitability.  Franchisee profitability is flat and well below healthy levels, raising the risk of more store closures. The decision to reduce discounting is dangerous in our view as the margin uplift may be wiped out by lower transaction volumes.

New Zealand has been a challenging retail market for most companies over the past 18 months. However, there are clear signs retail sales are likely to improve. Rate cuts of 250bp that began in August 2024 are starting to boost incomes and recent sales trends have been stronger. We expect NZ retail spending to rebound to 3.6% growth in FY26e, up from 0.6% growth in FY25. The three retailers with the largest sales exposure and upside to better NZ sales trends are Ampol, Harvey Norman and Bapcor.  NZ could account for 2%-3.5% in operating profit growth for these companies.

Endeavour Group reported a weak FY25 result with EBIT down 12%. There were mixed fortunes with Retail earnings down and Hotels up.  Recent sales trends suggest a similar dynamic in FY26e. However, we see more cost savings and less headwinds from its One Endeavour restructuring costs. We make EPS downgrades of 5% in both FY26e and FY27e given lower Retail sales and some gross margin pressure. Endeavour’s balance sheet has high gearing. When combined with its management changeover in January 2026, the risks are growing that an equity raising is used to improve its balance sheet and provide the capital to turnaround the business.

The Australian national accounts for the June 2025 quarter explain the strength in retail sales over the same time period. In the quarter, household income rose 7.6% and the seasonally adjusted savings rate dropped by one percentage point. Broader consumer spending rose 4.8% in the June quarter and retail spending rose 4.2%, the strongest rate of growth in two years. Can the retail sales momentum continue? With income growth likely to slow in FY26e, a further drop in savings will be needed to support retail spending. We expect retail spending to rise 3.9% in FY26e, ahead of FY25 at 3.3% growth.

The latest household spending indicator (replaces Retail Sales series) showed retail sales growth of 4.8% for July 2025, up from 3.8% in June 2025. The strongest growth was in “other” retailing, which includes online pure-play, pharmacy and recreational goods. Department stores had a surprisingly strong result and household goods was solid too. We expect growth rates to hover close to 4% over the remainder of 2025.

Coles reported FY25 EBIT up 7.5% on a 52-week basis. Growth was stronger in Supermarkets, partly offset declines in Liquor and higher overheads. Coles has had a strong start to FY26e sales in Supermarkets, which we largely attribute to market share gains. The combination of better sales, one-off costs from last year rolling off and supply chain savings should support group EBIT growth of 12.5% in FY26e. We expect growth to then step down to 5%-7% in FY27e and beyond.

Woolworths reported FY25 EBIT down 15%. While it was a rough year, the more concerning issue is that its rebound in FY26e has been tempered by guidance. The earnings recovery will be impacted by ongoing investment in its supply chain transformation and simplification. Woolworths sales trends are likely to accelerate beyond 1Q26e as price investment and execution improve and management disruptions settle down. We lower our EPS by 7.9% in FY26e and 9.6% in FY27e given higher one-off costs.

Inghams reported FY25 EBITDA pre AASB-16 of $236 million. While earnings were steady year-on- year on a 52-week basis, the fourth quarter deteriorated given excess poultry supply and lower prices. The oversupply arose because Inghams thought it could replace the lost Woolworths volumes. Oversupply will hurt Inghams’ 1H26e EBITDA but then should correct itself as production is reset. We expect pricing and margins to drop in 1H26e but then rise in 2H26e.

Accent Group reported FY25 EBIT of $110 million, in line with guidance and flat on the pcp. The trading update indicated LFL sales turned slightly positive on the 2H25 drop of 1.5%. The first Sports Direct store is due to open in November 2025. Guidance provided is for EBIT growth of high single digits, close to $120 million. We forecast $115 million EBIT for FY26e, growth of 4.5% with a view that competition will crimp gross margins.

GyG reported FY25 network sales growth of 23% and EBITDA at $65.1 million, up 46%. The company reported a step-down in comparable sales growth to 3.7% in the first seven weeks of 1Q26 vs 8.6% in 4Q25. The debate will be whether this lower growth persists and tempers expectations for margin expansion. While operating leverage may soften, the store rollout is skewed toward higher earning drive-thru sites and favourable moves in input costs will offset lower sales expectations in FY26e. The rebasing of comparable sales growth may be scrutinised, but even 4%-5% comp growth is still market leading.