Metcash Stock Earnings Reports

Metcash reported a solid H1 FY26 with disciplined cash generation and continued strategic progress, but results were slightly below management's own expectations. Key financials: group revenue $9.6bn (up 0.4% including tobacco; +4.5% ex-tobacco), EBIT $240.2m, underlying NPAT $126.7m (EPS $0.115), operating cash flow $262m, closing net debt ~ $600m (DLR ~1.0x), and an interim fully franked dividend of $0.085 per share. Management excluded $8.3m of one‑off integration and strategy costs this half and confirmed those one‑off costs will not recur in FY27. Pillar highlights: Food delivered strong earnings growth (EBITDA +9.8%, EBIT +3.6%) and is more diversified (Campbells & Convenience and Superior performing well); Liquor continued to take market share despite a tough, low‑inflation market and increased promotional intensity; Hardware & Total Tools showed improving trends with early signs of market recovery and positive EBITDA (excluding one‑offs). Strategic/update highlights: Sorted (the B2B digital marketplace) is annualizing ~ $4bn now and is expected to be ~ $6bn once the final ALM states migrate in January, materially modernizing wholesale operations; Project Horizon core build is complete with the first deployment scheduled June 2026 and full program completion by end‑2026; retail media roll‑out is progressing (270+ campaigns executed). Risks and dynamics: accelerated tobacco decline and illicit trade remain a headwind for Food retailers (management is pursuing enforcement, supplier wins and whole‑store growth initiatives), margin pressure in parts of the group driven by flat volumes and lower inflation, and ongoing testing/implementation risk around Horizon. Balance sheet and capital discipline remain strong with continued investment in DCs, technology and targeted M&A (Steve's Liquor Warehouse included this period). Overall, Metcash positions itself as a diversified wholesaler/retailer platform with growing digital marketplace scale and the balance sheet flexibility to pursue further growth.