Open a bottle! Endeavor (ASX:EDV) stock price jumps 11% on rising earnings


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the Endeavor Group Ltd (ASX:EDV) the stock price is in celebration mode on Monday.

At the time of writing, shares of the beverage and hotel network operator are up 11% at $7.23.

Endeavor stock price appears in the middle of the first listed results

  • Group sales relatively stable compared to the previous corresponding period, down 0.3% to $6.3 billion
  • Earnings before interest and taxes increased 3.2% to $556 million
  • Group net profit after tax (NPAT) increased 15.6% to $311 million
  • Online sales reached $603 million, reflecting a 24.8% increase
  • Earnings per share (EPS) up 16% to 17.4 cents per share
  • Fully franked interim dividend of 12.5 centimes per share

What happened during the first half?

Today marks an important milestone for Endeavor Group, its first full financial reporting period since listing on the ASX. The positive reaction to its half-year results makes it an even more exciting time.

After months of trading without a price sensitive announcement, investors are reacting positively to the information released today.

Despite a cycle against strong peers and a tough time with Omicron, Endeavor sales fell a low of 0.6% to $5.7 billion across the retail division . Boding well for Endeavor’s stock price, earnings have improved thanks to premiumization and reduced promotional spend.

Additionally, the Company’s hotel business remained impacted by COVID-19 measures. Compared to H1 FY20 (2019), sales were down 26%. However, sales increased 1.9% to $680 million from the previous corresponding period.

What did management say?

Endeavor Group Managing Director and CEO Steve Donohue commented on the result:

Our first 6 months of activity as an independent company have demonstrated the structural resilience of the Group. We kept group sales in line with last year and improved our profitability significantly. This is a positive result in a period strongly impacted by COVID-19. These financial results were achieved through the hard work and dedication of our team who responded diligently and flexibly to many challenges related to COVID-19.

Regarding the impacts on the hotel segment, Donohue said:

Our Hotels business was particularly hard hit in H1 F22. There were multiple and widespread impacts from COVID-19 in the first quarter, including shutdowns in key Victoria and New South Wales markets. We have, however, continued to invest in our hotels, retain core team members, roll out new digital services and create COVIDSafe environments; all of which allowed the business to rebound strongly during times when the impact of COVID-19 subsided.

And after?

Looking ahead, Endeavor warned that the first six weeks of second-half trading lagged FY21. Hospitality business was down 2.9% from last year’s sales, while retail trade is down 2% compared to the comparable period. Despite these numbers, the concern does not appear to be impacting Endeavor’s stock price today.

Additionally, the company is wary of potential headwinds, including input cost inflation, interest rate increases and increased competitiveness.

Finally, shareholders can expect to receive their dividend of 12.5 cents per share on March 28. It is important to note that the shares will become ex-dividend from March 1st.

Endeavor Stock Price Overview

Endeavor’s stock price has successfully navigated a challenging environment to provide market-beating returns over the past year. For context, the S&P/ASX 200 Index (ASX:XJO) is up 5.9% over the past 12 months. Meanwhile, the Australian drinks retailer is up 8.1%.

Based on the current share price, Endeavor Group is trading on a price-to-earnings (P/E) ratio of 26 times.


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