Oliver’s Real Food Cuts Expenses 15% Despite 6% Sales Drop
Oliver’s Real Food reports improved gross margins and reduced expenses despite a 6% sales decline, driven by strategic store closures and operational efficiencies.
- 6% decline in sales offset by 15% reduction in expenses
- Gross margin improved by 1 percentage point
- Lease liability write-back of $801k from Pheasant Nest store exit
- Closure of two unprofitable Officer stores in Victoria
- Board expresses cautious optimism amid ongoing market challenges
Improved Margins Despite Sales Dip
Oliver’s Real Food Limited has released its unaudited financial results for July and August 2026, revealing a nuanced performance. While sales fell by 6% compared to the prior corresponding period, the company managed to reduce expenses by 15% and increase its gross margin by 1 percentage point. These figures suggest that operational efficiencies and cost management are beginning to bear fruit, even as top-line revenue faces pressure.
Strategic Store Closures Drive Cost Savings
The company’s ongoing strategy to close unprofitable stores is a key factor behind the improved financial outcomes. Notably, the Board confirmed the closure of two Officer stores in Victoria, which have struggled to generate meaningful profits post-COVID and faced rising operational costs. These closures, effective around the end of September 2025, reflect a pragmatic approach to trimming loss-making assets and focusing resources on more viable locations.
Lease Liability Write-Back Provides Financial Relief
Oliver’s Real Food also reported a significant lease liability write-back of $801,000 related to the exit from its Pheasant Nest Northbound store. This write-back offsets a prior impairment charge of $1.243 million recorded in the previous fiscal year, providing a welcome boost to the company’s profit and loss statement for August. The settlement with Ampol over this store marks a positive resolution to outstanding lease matters.
Board’s Cautious Optimism Amid Market Challenges
The Board acknowledged that while the benefits of cost-cutting and operational improvements have taken time to materialize, the recent results support a cautiously optimistic outlook. However, the company remains mindful of ongoing market challenges that could impact future performance. The focus on improving in-store customer experience and staff training continues as part of the broader turnaround strategy.
Looking Ahead
As Oliver’s Real Food navigates this transitional phase, the coming months will be critical in validating whether these early signs of improvement can be sustained and translated into stronger full-quarter results. Investors will be watching closely to see how the company balances cost discipline with growth initiatives in a competitive retail environment.
Bottom Line?
Oliver’s Real Food’s disciplined cost management and store rationalisation hint at a leaner future, but sustaining momentum remains the key challenge.
Questions in the middle?
- Will the closure of Officer stores materially improve overall profitability?
- How will ongoing market pressures affect sales recovery in the coming quarters?
- Are there further lease settlements or impairments anticipated that could impact earnings?
