Retail drinks and hospitality business Endeavour Group has posted a slight increase in sales for the fiscal first half, but net profit was down as the group previously expected.

Group sales for the 27 weeks ended rose 2.5 per cent year on year to $6.7 billion, driven by growth in both the retail and hotels segments.

Dan Murphy’s and BWS both contributed to a 2.5 per cent increase in retail sales, while an improved food and bar offering helped deliver a 2.7 per cent uplift in hotels sales, said Steve Donohue, Endeavour Group MD and CEO.

“Dan Murphy’s strengthened its position as Australia’s preferred drinks destination for events through the festive season, with customers continuing to respond to our great range and Lowest Liquor Price Guarantee,” Donohue elaborated.

“BWS performed strongly through the half, with engagement with the younger adult demographic benefiting from the launch of our new brand campaign and innovation in our stores,” he added.

The retail network grew to 1718 stores at the end of the half, with the addition of 12 net new BWS stores, four new Dan Murphy’s locations and one ‘The Cellar by Dan Murphy’s’ concept store.

The group’s earnings before interest and tax were $661 million, up 2.6 per cent, benefiting from the focus on cost optimisation and gross margin management.

However, net profit after tax slid 3.6 per cent to $351 million, impacted by higher finance costs and in line with previous guidance.

For the first seven weeks of the second half, the group recorded flat trading activity in retail, reflecting subdued sales in January. Improvements in the segment began in February, with sales up 1.5 per cent over the month’s first three weeks.