Brambles shares drop amid ongoing demand weakness
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More news: Shares in Brambles have dropped nearly 6% to $14.72 in the first hour of trade after the logistics giant flagged ongoing demand weakness due to inventory optimisation by major customers.
The company said it was also impacted by inflationary pressures in labour costs globally, transport costs in Europe and ongoing fluctuations in fuel prices.
Brambles keeps FY guidance after steady March quarter
The news: Logistics company Brambles is sticking to its full-year guidance as price increases helped lift profit and sales in the third quarter despite inventory optimisation among retailers.
The numbers: Sales revenue for the nine months to 31 March 2024 was up 9% to USD4.87 billion ($7.55 billion), with price hikes helping to offset lower volumes. The company expects to lift full-year sales revenue between 6% to 8%, while underlying profit is forecast to rise between 13% and 15%.
The context: The pallets and containers supplier said ongoing inventory optimisation by retailers continued to weigh on demand from existing customers in the third quarter.
It reported about 3 million additional pallet returns across its network during the quarter, bringing the year-to-date total to about 11 million pallets. Still, the company has benefited from price increases that were mostly put in place late last year as well as disciplined cost recovery.
What they said: “Despite these improved supply chain dynamics, we continue to experience inflationary pressures in labour costs globally, transport costs in Europe and ongoing fluctuations in fuel prices. These were key contributors to ongoing price realisation in the third quarter as we continue to demonstrate commercial discipline to recover the cost-to-serve,” chief executive Graham Chipchase said.
The source: ASX announcement
