Australian retail sales rose 6.9% year-on-year in November 2025 according to ABS data. The shift of ABS data source does makes us cautious about the magnitude of the reported strength in sales. Even so, it does suggest another strong month in non-food. Household goods such as furniture, electronics and hardware, had the strongest growth up 10.6%. At-home food and liquor was weakest at 3.6% growth.

Nick Scali has provided a Christmas trading update that guides for ANZ sales to grow 10% to 12% in 1H26e. Group net profit after tax guidance has also been upgraded to between $37 and $39 million. The better sales performance in ANZ has driven the upgrade. We lift our revenue forecasts and gross margin expectations, reflecting the supportive backdrop domestically which we expect to slow post FY26e.

Treasury Wines’ new CEO Sam Fischer provided an update that resets the company’s inventory position in its key Chinese and US markets. The disclosure confirms concerns that distributors hold too much inventory. The underlying earnings of Treasury Wines has been overstated in FY24/FY25 and will be understated in FY26e/FY27e. The company will need to rebuild trust and transparency with investors in order to achieve a higher multiple.

Australian convenience retailers Ampol and Viva have an opportunity to roll out quick-service restaurant (QSR) counters across their high traffic sites and lift non-fuel margins to be in-line with US peers. Foodservice penetration in the US is an aspirational target for the domestic market, but Australian fuel retailers can grow gross profit per store by tapping into the circa 70% gross margins in QSR. QSR store rollout supports Ampol and Viva’s five-year outlook for growing non-fuel earnings, whilst elevated refiner margins are also supportive in the near-term.

Myer reported total sales growth of 3.0% for the first 19 weeks of trade for 1H26e. With Visible Alpha consensus expectations of 2.2% for 1H26e we expect upward revisions to consensus sales. Commentary around costs suggested expenses continue to be tightly managed. The stronger than expected growth came from lower gross margin categories such as concessions and homewares.

We have produced a chart pack about the outlook for the liquor industry. The primary debate is the structural vs cyclical components impacting the decline in consumption. While we see structural decline, we expect it to be in the order of -0.5% per capita, per annum, far lower than the circa -6% p.a in the past two years.  We are seeing signs of improving volumes in on-premise (pubs and restaurants).

Bapcor has provided yet another downgrade in a trading update, making it the third downgrade in 12 months. The company’s decision to stick with 2H26e guidance seems brave given the need to invest in price in its core Trade segment. The gearing is likely to rise to 3.3x on our forecasts, above its bank covenants of 3.0x. A capital raising of circa $200 million seems likely to us.

Premier Investments’ AGM trading update gave EBIT guidance for 1H26e of $120 million on a pre AASB-16 basis exclusive of significant items (UK losses for Peter Alexander). Visible Alpha consensus estimates appeared muddied by various factors causing uncertainty around earnings changes. Limited AGM detail provided suggests Peter Alexander continues to perform but sales and gross margins at Smiggle have continued to deteriorate.

Australian retail sales rose 6.2% in October 2025 year-on-year, a surprise given our feedback of modest spending in October in what felt like anticipation of Black Friday deals. The theme of a strong consumer continued from the National Accounts update for the September quarter in which household income was revised higher. Higher house prices and improved savings rates are buffering the consumer with sentiment trending higher.

The 2025 festive season is shaping up as a good one for consumers. They are opening their wallets and buying bargains. The challenge for retailers is the spend is not evenly distributed. Consumers bought more in November and may buy less in December. We have had positive sales feedback for furniture, auto and online and expect these to do well over 1H26e. At the other end of the spectrum, we have had weak sales feedback on footwear and liquor. The challenge for electronics is lapping incredibly good growth from November and December 2024. Using Visible Alpha consensus as the reference point, we see downside risk to sales for JB Hi-Fi, Harvey Norman and Endeavour. Retail has been more promotional and 1H26e risks to gross margin also exist. At EPS, we see downside risk for Accent, JB Hi-Fi, Endeavour Group and Myer. For those wanting a more light-hearted take, further down we have our Christmas gift ideas.