Metcash Limited posted a steady FY26 performance, with group revenue rising to $19.6 billion and EBITDA up 1.9%, driven by growth in Food and digital channels despite challenges in Hardware.
- Group revenue up 0.7% to $19.6bn including charge-through sales
- Underlying profit after tax declined 2.4% to $268.8m amid higher finance costs
- Food pillar EBIT grew 5.4%, Liquor market share increased to 32.3%
- Hardware & Tools integration completed; earnings pressured by soft trade market
- Sustainability milestones met early, including 100% renewable electricity target
Metcash Navigates Mixed FY26 Market with Steady Revenue and Earnings
Metcash Limited (ASX:MTS) has delivered a resilient financial performance for the year ended 30 April 2026, posting group revenue of $19.6 billion, a modest 0.7% increase on the prior year. EBITDA rose 1.9% to $761.7 million, underpinned by strong growth in the Food pillar and digital platforms, though underlying profit after tax slipped 2.4% to $268.8 million, pressured by higher finance costs and depreciation.
The company’s diversified portfolio cushioned it against sector-specific headwinds, including a continued decline in tobacco sales and softness in residential building activity impacting Hardware & Tools. Metcash’s balance sheet remains robust, with a debt leverage ratio steady at 1.0x, at the low end of its target range, supporting ongoing investment and shareholder returns.
Growth Led by Food and Digital Channels
The Food pillar was a standout, with EBIT climbing 5.4% to $261.8 million, driven by improved price competitiveness in independent supermarkets and rapid expansion of the Foodservice & Convenience business. This segment, bolstered by the integration of Superior Foods and new tobacco supply contracts with major petrol operators, now generates sales exceeding $10.5 billion. The IGA network’s price gap to major chains narrowed to just 1.2% in large stores, a significant achievement in a value-conscious consumer environment.
Metcash’s digital B2B marketplace, Sorted, accounted for approximately 30% of group revenue, transacting $5.9 billion in sales and enhancing supply chain efficiency. The LocalEyes retail media network also gained traction, generating $20.5 million in revenue with over 760 in-store digital screens, supported by a new partnership with Nine and QMS.
Liquor Market Share Gains and Hardware Integration Progress
In Liquor, revenue increased 1.0% to $5.4 billion, with market share reaching 32.3%, reflecting continued consumer preference for localised independent offers. EBIT was $100.1 million, slightly down from the prior year due to softer first-half trading, but improved in the second half as inflation returned and volumes recovered. The renewal of over $500 million in national retail and on-premise contracts underscores the strength of Metcash’s multi-channel model.
Hardware & Tools, formed by the June 2025 merger of Total Tools and the Independent Hardware Group, reported revenue growth of 4.3% to $3.7 billion. However, EBIT declined to $177.3 million, reflecting challenging trade conditions in Victoria and Tasmania. The combined business is focused on retail execution and supplier partnerships to restore margins ahead of an expected market recovery.
Strategic Moves in Retail Ownership and Technology
Metcash took its first steps into retail ownership with the acquisition of three Foodland IGA supermarkets in South Australia and the pending purchase of Daly’s IGA Group in Victoria. This move aims to accelerate rollout of initiatives like loyalty programs and e-commerce, while providing operational insights to improve wholesale performance.
Technology investments continued, with the near completion of Program Horizon, a multi-year ERP and infrastructure upgrade designed to create an AI-ready platform. These upgrades are expected to enhance inventory management, operational intelligence, and support future growth in retail media and digital services.
Board Renewal and Remuneration Adjustments
In governance, long-serving director Helen Nash retired in July 2026, after a decade on the board. She was replaced by Nicky Sparshott, who brings extensive retail and digital transformation experience from senior roles in Australia and internationally. The board continues to focus on succession planning and diversity.
The remuneration framework shifted further towards long-term incentives, with a corresponding reduction in short-term opportunity, reinforcing alignment with shareholder value creation. FY26 short-term incentive outcomes ranged from 7.1% to 25.4% of maximum, reflecting the challenging operating environment and the mixed performance across pillars.
Sustainability Milestones Achieved Ahead of Schedule
Metcash made significant strides in sustainability, achieving its interim 2030 emissions reduction target a year early with a 22.7% decrease in Scope 1 and 2 emissions from the prior year. The company sourced 100% renewable electricity for Australian operations from November 2025, excluding newly acquired Superior Foods sites. On-site solar generation increased by 12%, and the group expanded its mental health first aid accreditation to over 450 team members.
Waste reduction initiatives reached 373 stores through the BinTrim Waste Program, and battery recycling programs have collected approximately 680 tonnes since inception. External ESG recognition remained strong, with Metcash maintaining a top decile ranking in the Dow Jones Sustainability Indices and improving its modern slavery rating to an ‘A’.
Risk Management and Outlook
Metcash’s risk disclosures highlight ongoing operational, compliance, financial, and climate-related risks. The company’s extensive supply chain and diversified retail network provide resilience against disruptions, while investments in technology and digital platforms aim to future-proof the business.
Looking ahead, Metcash expects FY27 trading conditions to remain challenging but enters the year with momentum, particularly in Hardware & Tools, which showed strong second-half growth. Food and Liquor have rebounded from a subdued May, with new tobacco contracts expected to support convenience sales. The company remains confident in its strategy to deliver sustainable long-term value despite external uncertainties.
Investors and observers will be watching how Metcash balances retail ownership expansion with wholesale support, the pace of digital platform adoption, and the continued integration and margin recovery in Hardware & Tools as key drivers of future performance.
Bottom Line?
Metcash’s FY26 results underscore its steady hand navigating sector headwinds, but the path to margin recovery in Hardware and successful retail ownership expansion will define its next chapter.
Questions in the middle?
- How will Metcash’s retail ownership strategy impact its wholesale relationships and margins over time?
- Can the integration of Total Tools and Independent Hardware Group deliver sustainable margin improvements amid soft trade markets?
- Will ongoing investments in digital platforms like Sorted and LocalEyes materially shift Metcash’s earnings mix and competitive positioning?