Sigma’s Chemist Warehouse engine keeps accelerating into FY27

Chemist Warehouse sales maintain double-digit momentum

Sigma Healthcare Limited (ASX:SIG) has carried the merger’s growth momentum into FY27, with Australian Chemist Warehouse branded store sales up 12.1% from 1 July to 16 October and like-for-like sales up 9.8%. International sales rose 30.2% in constant currency in the three months to 30 September, with like-for-like growth of 15.8%.

The update is significant because it arrives after the initial structural uplift from GLP-1 sales has cycled through, according to managing director and CEO Vikesh Ramsunder. Sigma said some discretionary categories, including ladies’ fragrances, vitamins and supplements, were softer as consumers responded to cost-of-living pressures, while beauty, healthcare and GLP-1 supporting products performed more strongly.

First full-year merger results show operating leverage

FY26 was Sigma’s first full 12-month period as a merged group with Chemist Warehouse. Revenue increased 15.5% to $10.8 billion and normalised EBIT rose 20.6% to $1.09 billion, while net debt stood at $663 million, equivalent to 0.57 times normalised EBITDA. The company paid a total fully franked dividend of 4 cents per share.

The result builds on the earlier first-half merger performance reported in February, when revenue rose 14.9% and normalised EBIT increased 18.7%. Sigma added 24 Australian Chemist Warehouse stores during FY26, refurbished 18 more and expanded its international network by 20 stores. The global network now exceeds 950 stores, while the Australian Chemist Warehouse estate stood at 561 stores at 30 June.

Integration savings have a larger target ahead

Sigma delivered $32.6 million in annualised merger synergies during FY26, at one-off integration costs of $25.9 million. Support centres in Preston were consolidated, an e-commerce distribution centre was closed and distribution volumes were shifted into existing facilities in Western Australia and South Australia.

The next phase is more technical: Sigma is rationalising applications and integrating Chemist Warehouse into its established SAP platform, while store systems remain outside the scope of the project. The company is targeting $100 million of annual synergies by FY29, a goal first increased from $60 million in its earlier synergy target announcement.

Measured international expansion continues

International growth remains part of the expansion plan, but management continues to describe the approach as disciplined. Ireland is now profitable, and Sigma is preparing to open two London stores before Christmas through its joint venture with Greenlight Pharmacy, with three more planned for 2027. The company also said it is progressively closing its physical presence in China and decided not to proceed with the potential acquisition of Boots after participating in the structured sale process.

For the first half, Sigma remains on track to add 14 Chemist Warehouse stores and 42 Amcal and Discount Drug Stores in Australia, along with 19 international stores. It expects Chemist Warehouse branded store sales to deliver double-digit growth for the balance of the period, although that statement is a sales expectation rather than formal earnings guidance.

Christmas trading and execution provide the next test

The company is now approaching the key Christmas trading period with a larger network, strong like-for-like growth and further integration work still to complete. Oral GLP-1 formulations are anticipated to enter the market in the second half of FY27, but the timing and commercial effect remain forward-looking.

That leaves Sigma with a favourable but demanding setup: current trading is strong, the balance sheet is less stretched than it was at the start of the merger journey, and the earnings case increasingly depends on execution rather than headline expansion alone. The important evidence will come from first-half sales, store onboarding and whether the SAP integration delivers the next tranche of savings without disrupting the retail engine.