URGENT UPDATE: Endeavour Group Ltd (ASX: EDV) is facing a significant shake-up as Executive Chairman Ari Mervis has officially resigned, citing disagreements with the Board. This unexpected move raises critical questions about the future of the company and its stock performance.
Effective immediately, Lead Independent Director Duncan Makeig will step in as interim Chairman while the company seeks a permanent replacement, expected to be appointed before 1 January 2026. This leadership transition comes at a precarious time as analysts assess the implications for Endeavour’s stock, which closed at $4.16 yesterday.
According to broker Bell Potter, the resignation has added to the uncertainty surrounding Endeavour Group’s shares, which have plummeted approximately 21.66% over the past year. In stark contrast, the S&P/ASX 200 Index has risen more than 13% in the same time frame. Despite this downturn, Bell Potter has maintained a “hold” recommendation, citing a potential upside of 8.2% with a 12-month price target set at $4.50.
The company’s performance is further complicated by a recent 4.5% decline in liquor retail turnover reported by the ABS for June 2025. This drop has raised concerns, especially as Endeavour operates Australia’s largest retail drinks network, primarily through its Dan Murphy’s and BWS brands, which account for about half of all off-premises liquor sales in the country.
While Endeavour’s pokies expenditure has shown resilient growth—3.9% in Queensland and 9.6% in Victoria—analysts are looking for signs of recovery in liquor sales. Bell Potter suggests that a decrease in interest rates could stimulate consumer spending, potentially aiding a rebound in liquor retail performance.
However, the outlook remains cautious. Bell Potter warns that profit margins may face pressure in fiscal year FY26 due to increased price competition, particularly from Liquorland, as well as other market challenges including gross margin pressures and sticky wage inflation.
As the market digests these developments, the key question remains: Are Endeavour Group shares a buy, sell, or hold? Investors and analysts alike are advised to stay tuned for further updates as the company navigates this leadership change and economic challenges.
This developing situation is sure to impact Endeavour Group’s performance and investor sentiment moving forward. Shareholders are urged to monitor the evolving landscape closely as the interim leadership embarks on a pivotal recruitment process.
