Metcash Ltd. (MTS.AX): Mixed trading update, hardware margin pressures to persist, corporate costs/net interest drive downgrades

Research evidence excerpt

Metcash Ltd. (MTS.AX): Mixed trading update, hardware margin pressures to persist, corporate costs/net interest drive downgrades

Equity Research

22 June 2026 | 8:05PM AEST

Metcash Ltd. (MTS.AX): Mixed trading update, hardware margin

pressures to persist, corporate costs/net interest drive downgrades

MTS’ FY26 results today were in line with preliminary numbers provided in May. Peter Marks

+61(02)9321-8846 |

The 7-week trading update was mixed relative to expectations with Food peter.marks@gs.com

Goldman Sachs Australia Pty Ltd

softening in May (on macro conditions) but rebounding in June; Liquor in line

Rayanne Haidar

and Hardware stronger than expected. Nevertheless, MTS flagged expectations +61(2)9321-8739 |

for ongoing margin pressure at the retail level in Hardware in FY27, as well as rayanne.haidar@gs.comGoldman Sachs Australia Pty Ltd

rising D&A costs, net interest expense and corporate costs (corporate and net James Leigh, CFA

interest combined are a 3% downgrade relative to consensus PBT), which drives +61(2)9321-8450Goldman Sachs Australia| james.leigh@gs.comPty Ltd

our earnings downgrades. Whilst earnings downgrades are disappointing, we

believe the Food & Liquor business is well-placed to compete. MTS management

is proactively addressing the cost base and the business remains well-placed to

benefit once the trade hardware cycle turns. We remain Buy rated; EPS changes

-7%/-6%/-6% FY27-29E; PT unchanged at $3.90.

Trading update mixed; hardware margin pressures to continue: MTS trading

update for the first 7 weeks of 1H27 was mixed with Food sales growth for the first 7

weeks soft overall driven by weak May but strong in the first 3 weeks of June; Liquor

was in line; and Hardware was better than expected. MTS noted that hardware retail