‘Exacerbated volatile conditions': Flight Centre downgrades full-year profit forecast amid US tariff chaos
Flight Centre has downgraded its full year profit guidance, blaming US President Donald Trump's tariff chaos 'exacerbated the volatile trading conditions'.
Shares in the Brisbane-headquartered travel agent fell to a low of $11.94 in early trade on Wednesday after it revised its profit guidance from between $365 million to $405m, to a range of $300m and $335m.
Shares have since recovered to be up 0.8 per cent to $12.56 just after 10am.
In an update to the Australian Securities Exchange, Flight Centre pointed to 'recent US developments' that have led to lower-than-expected total transaction value growth in core brands, impacting overall margins.
'Second quarter earnings momentum reported at the half year flowed through to early 3Q results before US policy changes began to impact business and consumer confidence and corporate and leisure sales in March,' it said.
The company said several actions were being implemented to address 'short-term results volatility, under-performing businesses' like StudentUniverse — a travel booking service for students and young adults — and its Canada leisure division.
These included cutting its full-time employees by 5 per cent, predominantly in non-customer-facing areas, a recruitment freeze in other businesses, a 15 to 20 per cent capital expenditure reduction, as well as temporary airline capacity shifts away from US destinations.
Flight Centre is currently reviewing StudentUniverse, which is trading below pre-pandemic levels and expected to lose up to $10m in the 2025 financial year. The company was initially expecting a result close to breakeven.
'Stronger overall results are expected in FY26 and beyond as trading conditions stabilise and as the strategies that are already in place gain momentum,' Flight Centre said.
Flight Centre at the same time also announced an on-market share buyback of up to $200m, set to begin early next month and be completed within 12 months.
'While FY25 has been a turbulent year, our fundamentals are strong and we are well placed to deliver more rapid growth and enhanced shareholder returns next year and into the future as the trading cycle stabilises,' managing director Graham Turner said.
'Group-wide, we are maintaining cost discipline and implementing strategies to boost productivity and enhance the customer experience.
'The $200m buyback we have just announced underlines both our belief in the strength of our business and our commitment to enhancing shareholder returns.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
an hour ago
- News.com.au
Sold in 12 minutes: Fund manager's $17.5m penthouse pay day
A top fund manager who took just 12 minutes to buy his mega penthouse with a wellness centre and eight-car garage has sold it four years later for $17.5m. In one of the biggest sales for Brisbane this year, the property at 1821/22 Refinery Parade in New Farm sold after negotiations overnight following four written offers. Brisbane expat Ben Cleary, a director of multi-billion dollar fund manager, Tribeca Investment Partners, paid $10m for the property in 2020 — a record price at the time. Place Estate Agents managing director Sarah Hackett negotiated the sale of the property, but declined to reveal the sale price. Sources close to the deal have revealed it was bought by a local family with an international business for $17.5m. Mrs Hackett said the vendors took 12 minutes to inspect the property back in 2020 when they were relocating to Brisbane from Singapore and then amalgamated two penthouses into one and undertook a full renovation. 'The most extraordinary thing about this apartment is the view,' Mrs Hackett said. '360 degrees...I just don't think you can get a better position. The views can't be built out.' She said the four written offers were all from local families, some who owned property across Australia. 'It's just proof that demand for apartment living is so strong,' Mrs Hackett said. 'We've got so many people wanting to downsize and forgo the maintenance of a big home and go to one level of living. They want something of scale, but without the upkeep.' She said many people in New Farm, Hamilton, and surrounding suburbs, were looking to downsize to house-sized apartments. 'One of the perks of this penthouse was the body corporate provided a security guard with a dog every night.'. Mr Cleary and his wife, Jane, were revealed as the buyers of a heritage-listed mansion in Sutherland Ave, Ascot, for $23m, which set a new home price record for Brisbane last year. That sale was negotiated by Damon Warat of Ray White Ascot and Jordan Navybox of Cohen Handler Queensland.
West Australian
3 hours ago
- West Australian
Australian share market soars to fresh high
Australia's share market surged in morning trading to a new record, lifting past the high-water mark set in February. The benchmark S&P/ASX200 was up 34.2 points, or 0.40 per cent to 8,621.4 by midday on Wednesday, topping the Valentine's Day record of 8,615.2 points and building on the previous day's record close. The broader All Ordinaries was up 34.9 points, or 0.40 per cent, to 8,847.4, just 35 points shy of its intraday record of 8,882 points, also set on February 14. The uptick followed a positive session on Wall Street and came after officials from the US and China agreed on an in-principle framework to resolve export restrictions on rare earths and magnets. Details on the agreement remained light, and it still required approval from US President Donald Trump and China's President Xi Jingping, IG Markets analyst Tony Sycamore said. "If the two presidents review and approve the outcome of today's trade talks, it will likely include maintaining the reduction in US tariffs on Chinese goods at 30 per cent (down from 145 per cent) and Chinese tariffs on US goods at 10 per cent (down from 125 per cent)," he said. The de-escalation in US-China tensions helped lift large cap miners Fortescue (up two per cent) and BHP (up 1.8 per cent), but Rio Tinto continued to be the laggard of the iron ore giants, grinding 0.3 per cent higher. Materials stocks were among the best performing sectors, up 0.7 per cent, as energy stocks pushed 0.8 per cent higher and real estate lifted one per cent. Only two of 11 local sectors - IT and utilities stocks - were in the red by midday. Gold miners were down again as the precious metal continued to consolidate at around $US3,350 ($A5,140) an ounce. The US-China rare earths "agreement" weighed on local miners of the minerals, with Lynas Rare Earths the top-200's worst performer and down more than six per cent in early trade. An 0.8 per cent lift in energy stocks was helped by a more than two per cent charge from Woodside to $23.56, as oil prices rolled over after hitting seven week highs on Tuesday. Commonwealth Bank hit a fresh record high for a second day in a row, reaching $183.19 before easing to $182.46 and taking its value to $305 billion. CBA's big three competitors traded either side of flat as investors tempered their appetite for Australian banks' famously lofty valuations. The financial sector is trading at record levels, up 0.2 per cent for the day and up by more than 25 per cent since early April's post-"liberation day" lows. Buy now, pay later provider Zip Co was leading the top-200, rallying 14.4 per cent after upgrading forward guidance on the back of strong growth in its US business. Qantas has slipped 1.2 per cent to $10.52 after announcing it will close Jetstar Asia, its Singapore-based intra-Asia airline, due to weak earnings. The airline will redeploy 13 aircraft to Australian and NZ. The call comes two weeks before its domestic rival Virgin Australia relists on the Australian Securities Exchange. Local technology stocks took a breather after rallying on Tuesday, shedding 0.2 per cent, but data centre plays were still pushing higher, with Megaport and NextDC both up more than 1.7 per cent each. The Australian Dollar is buying 65.04 US cents, up from 65.12 US cents on Tuesday at 5pm.
Perth Now
3 hours ago
- Perth Now
Australian share market soars to fresh high
Australia's share market surged in morning trading to a new record, lifting past the high-water mark set in February. The benchmark S&P/ASX200 was up 34.2 points, or 0.40 per cent to 8,621.4 by midday on Wednesday, topping the Valentine's Day record of 8,615.2 points and building on the previous day's record close. The broader All Ordinaries was up 34.9 points, or 0.40 per cent, to 8,847.4, just 35 points shy of its intraday record of 8,882 points, also set on February 14. The uptick followed a positive session on Wall Street and came after officials from the US and China agreed on an in-principle framework to resolve export restrictions on rare earths and magnets. Details on the agreement remained light, and it still required approval from US President Donald Trump and China's President Xi Jingping, IG Markets analyst Tony Sycamore said. "If the two presidents review and approve the outcome of today's trade talks, it will likely include maintaining the reduction in US tariffs on Chinese goods at 30 per cent (down from 145 per cent) and Chinese tariffs on US goods at 10 per cent (down from 125 per cent)," he said. The de-escalation in US-China tensions helped lift large cap miners Fortescue (up two per cent) and BHP (up 1.8 per cent), but Rio Tinto continued to be the laggard of the iron ore giants, grinding 0.3 per cent higher. Materials stocks were among the best performing sectors, up 0.7 per cent, as energy stocks pushed 0.8 per cent higher and real estate lifted one per cent. Only two of 11 local sectors - IT and utilities stocks - were in the red by midday. Gold miners were down again as the precious metal continued to consolidate at around $US3,350 ($A5,140) an ounce. The US-China rare earths "agreement" weighed on local miners of the minerals, with Lynas Rare Earths the top-200's worst performer and down more than six per cent in early trade. An 0.8 per cent lift in energy stocks was helped by a more than two per cent charge from Woodside to $23.56, as oil prices rolled over after hitting seven week highs on Tuesday. Commonwealth Bank hit a fresh record high for a second day in a row, reaching $183.19 before easing to $182.46 and taking its value to $305 billion. CBA's big three competitors traded either side of flat as investors tempered their appetite for Australian banks' famously lofty valuations. The financial sector is trading at record levels, up 0.2 per cent for the day and up by more than 25 per cent since early April's post-"liberation day" lows. Buy now, pay later provider Zip Co was leading the top-200, rallying 14.4 per cent after upgrading forward guidance on the back of strong growth in its US business. Qantas has slipped 1.2 per cent to $10.52 after announcing it will close Jetstar Asia, its Singapore-based intra-Asia airline, due to weak earnings. The airline will redeploy 13 aircraft to Australian and NZ. The call comes two weeks before its domestic rival Virgin Australia relists on the Australian Securities Exchange. Local technology stocks took a breather after rallying on Tuesday, shedding 0.2 per cent, but data centre plays were still pushing higher, with Megaport and NextDC both up more than 1.7 per cent each. The Australian Dollar is buying 65.04 US cents, up from 65.12 US cents on Tuesday at 5pm.
