Chemist Warehouse Posts Record Sales and 35% EBIT Growth in 1H FY25
Chemist Warehouse Group has delivered a standout first half in FY25, reporting record sales growth and a significant expansion in EBIT margins, driven by new store openings and international expansion.
- Total retail network sales surged to $5.15 billion, up 13% year-on-year
- EBIT rose 35% to $438 million with margin expansion of 400 basis points
- 19 new stores opened, including two in Dubai, marking entry into a new geography
- Progress made on transformational merger with Sigma Healthcare, expected to complete in February
- Launch of new products like Messi men's fragrance contributed to strong sales momentum
Robust Sales Growth and Margin Expansion
Chemist Warehouse Group (CWG) has reported a stellar trading update for the six months ending 31 December 2024, posting record retail network sales of $5.15 billion. This represents a 13% increase over the prior corresponding period, with like-for-like sales growth of 10.3% across its Australian and international operations. The group's EBIT surged by 35% to $437.9 million, accompanied by a notable 400 basis point expansion in EBIT margin to 22.3%, underscoring improved operational efficiencies.
The strong performance was bolstered by a particularly robust December trading period, which CEO Mario Verrocchi highlighted as a key driver of the results. The group's ability to sustain double-digit like-for-like sales growth reflects both consumer demand resilience and effective execution of strategic initiatives.
Strategic Expansion and New Market Entry
During the half, Chemist Warehouse opened 19 new stores, expanding its retail footprint to 658 outlets across five geographies. Notably, the group entered the Dubai market with two new stores, signaling its ambition to tap into attractive international opportunities beyond its established Australian base. This geographic diversification is expected to provide new revenue streams and growth avenues.
Alongside physical expansion, CWG progressed its wholesale supply transition to Sigma Healthcare, aiming to drive further supply chain efficiencies. The launch of Wagner Pharma and the successful introduction of the Messi men's fragrance also demonstrate the group's focus on innovation and supporting partner brands, which contributed positively to sales momentum.
Merger with Sigma Healthcare on Track
A significant highlight of the period was the advancement of the transformational merger with Sigma Healthcare, anticipated to complete in February 2025. This merger is poised to create a more integrated pharmaceutical retail and wholesale powerhouse, potentially unlocking synergies and enhancing competitive positioning in the sector.
CEO Verrocchi expressed confidence entering 2025, emphasizing the group's strong foundation for continued growth and network expansion. The merger's completion will be a critical milestone to watch, as it may reshape the dynamics of pharmaceutical retail in Australia and beyond.
Outlook and Market Implications
While these results are preliminary and subject to audit, the clear trajectory points to sustained momentum for Chemist Warehouse. The combination of solid organic growth, strategic store openings, international market entry, and the pending Sigma merger positions the group well to capitalize on evolving healthcare retail trends.
Investors will be keen to monitor how the integration with Sigma unfolds and whether the anticipated efficiency gains and expanded market reach materialize as expected. The group's ability to innovate with new product launches also remains a differentiator in a competitive landscape.
Bottom Line?
Chemist Warehouse’s record half sets the stage for a transformative year ahead, with the Sigma merger poised to redefine its market footprint.
Questions in the middle?
- How will the Sigma merger impact Chemist Warehouse’s supply chain and cost structure post-completion?
- What are the growth prospects and competitive challenges in the newly entered Dubai market?
- Can Chemist Warehouse sustain double-digit like-for-like sales growth amid evolving consumer and regulatory environments?
