Easing Restrictions Expected to Normalise Endeavour’s Retail and Hotel Segments

We maintain our AUD 6.20 fair value estimate for wide-moat Endeavour Group following the September-quarter trading update that was broadly aligned with our expectations. Varying degrees of coronavirus-related trading restrictions throughout Australia, with particularly strict lockdowns in Victoria and New South Wales, materially affected operating conditions during the September quarter. The trading restrictions continued to support the elevated levels of at-home consumption since the onset of the pandemic. While sales within the retail segment were flat on the same period in fiscal 2021, they remain approximately 20% above prepandemic levels. Sales within the hotels segment were down approximately 10% on the same period in fiscal 2021, which was also partially restricted by lockdowns, and around 40% below prepandemic levels.