UPDATE: Endeavour Group Ltd (ASX: EDV) faces significant upheaval as Executive Chairman Ari Mervis has resigned, citing disagreements with the Board. The announcement was made on Monday, triggering immediate concern among investors as shares dropped by 21.66% over the past year.
URGENT DEVELOPMENTS: In the wake of Mervis’ departure, Duncan Makeig, the Lead Independent Director, will serve as interim Chairman while the company searches for a permanent replacement. This leadership shift comes at a critical time for Endeavour, which has seen its liquor turnover decline sharply, with a reported 4.5% drop in June 2025.
IMPACT ON INVESTORS: Broker Bell Potter has responded with a cautious analysis, maintaining a “hold” recommendation on Endeavour Group shares, which closed at $4.16 yesterday. With a projected 12-month price target of $4.50, investors can expect a modest potential upside of 8.2%. However, the outlook remains clouded by ongoing challenges in the liquor market.
Endeavour, known for its extensive network of liquor retail and hospitality operations, including major brands like Dan Murphy’s and BWS, is grappling with increased price competition, particularly from Liquorland. The company, spun off from Woolworths in 2021, controls about half of Australia’s off-premises retail liquor sales.
WHAT TO WATCH: Analysts believe a recovery in liquor sales could hinge on falling interest rates, which might boost consumer spending. Yet, profit margins are expected to face pressures, especially in FY26, due to external market factors and potential strategic shifts under new leadership.
With Endeavour trading at historically low multiples of 12x EBIT and 15x PE, analysts suggest this reflects necessary caution amid ongoing gross margin pressures, wage inflation, and the uncertainties surrounding its One Endeavour program.
The situation is developing, and investors are urged to monitor the recruitment of a new chairman closely, as that decision could significantly influence Endeavour Group’s strategy and market performance moving forward.
Stay tuned for more updates as this story unfolds.
