Endeavour Group (ASX:EDV) has reported a sharp decline in underlying profit after tax after a major strategic review led to hundreds of millions of dollars in asset write-downs and restructuring costs.

The retail and hospitality group’s preliminary unaudited results for the 2026 financial year showed underlying net profit after tax fell 17.4% to $363 million, from $426 million a year earlier.

The result included $372 million in pre-tax significant items, equal to $311 million after tax, as Endeavour moved to simplify its portfolio and reset its asset base. The size of those charges highlights how the company’s review is flowing through the profit and loss statement even as its core retail and hotel businesses continued to generate higher sales.

The company said those costs included $58 million in restructuring and strategic review expenses, as well as a $40 million provision tied to the planned end of its supply chain services agreement with Woolworths Group at the Melbourne Liquor Distribution Centre.

Despite the weaker profit, group sales remained resilient, rising 1.3% year-on-year to $12.21 billion. Retail sales increased 0.7% to $10.02 billion, while hotel sales climbed 4.2% to $2.19 billion.

Underlying earnings before interest and tax (EBIT) fell to $845 million from $926 million in the prior year.

Endeavour Group managing director and chief executive Jayne Hrdlicka said the asset reset was an important step in simplifying the company’s operations and focusing investment on its core businesses.

“After a comprehensive review of our portfolio, we have reassessed the carrying value of some of our assets, including legacy technology systems, wineries and vineyards and a small number of Retail stores and Hotels,” Hrdlicka said.

A key focus of the review is resetting the company’s multi-brand retail strategy. Endeavour said it aims to strengthen Dan Murphy’s price position while better differentiating Dan Murphy’s and BWS for their respective customer bases.

The company is also targeting major cost savings, with a goal of delivering $300 million in savings by financial year 2029, including $100 million expected in FY27. That makes execution over the next few years a central part of the reset, with management pointing to reduced operational complexity and improved productivity rather than any change to the group’s core format.

Management said the transformation program will concentrate on reducing operational complexity, improving productivity and directing capital toward higher-return opportunities.

As part of the reassessment of its wine production portfolio, Endeavour Group is exiting several winery assets, including Chapel Hill, Oakridge and Josef Chromy.

Endeavour Group is due to release its final audited full-year results on 24 August 2026.

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