Australian Consumer

Research evidence excerpt

Australian Consumer

Macquarie Equity Research

10 July 2026

Consumer Staples Dist & Retail

AustraliaAustralian Consumer

When the tide goes out...

Caleb Ajay

Key Points Wheatley Mariswamy

• Volatile CY26TD in Consumer, though recent strength sees the sector

now screening expensive (both Staples and Discretionary).

• Slowdown to come in FY27E; however, outlook will improve GregDring

progressively permitting a pivot to select Discretionary names.

• Preferred: SIG (H&B), JBH (structural tailwinds), BGA (LT growth); Least

preferred: EDV (cost pressure), ING (competition), WOW (post re-rate). Recommendation changes

• Downgrade:

Þ WOW: Underperform.

• Rough seas this year. It has been a volatile CY26 thus far, with the

Consumer sector being impacted by three RBA rate hikes, geopolitical

Preferences uncertainty and Federal Budget policy. As a result, the market has

pivoted to defensives, which has seen the Staples Index outperform by Most preferred Least preferred

~12% (led by WOW +39%). Meanwhile, Discretionary has recovered more SIG EDV

recently following the initial, apparent end of the conflict in Iran, and JBH ING

is now only underperforming by ~3%. Looking into FY27E, concerns on BGA WOW

inflation/RBA outlook are lingering, with the market pricing approx. half

a hike by the end of CY27. Operationally, we expect a cyclical slowdown Source: Macquarie Research, July 2026

to be realised, with household spend growth to slow to 1.5% y-y. We Coverage

believe select discretionary categories are still yet to bear the brunt of

Stock Price ($) TP ($) TSR (%) Rec.

weakening conditions over the past six months and will likely be seen in BGA 6.00 6.50 11% OP

the Dec half. COL 23.67 25.10 10% OP

• Selectively stepping into Discretionary.