Flight Centre shares plunge after weak trading update
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More news: Shares in Flight Centre have slumped more than 16% to $18.07 after the travel agency group reported a weaker than expected trading update, with growth in international ticket volumes in Australia largely offset by lower prices.
RBC Capital Markets analyst Wei-Weng Chen said the company appeared to have delivered an FY25 downgrade, in line with weaker outlook from peers.
What they said: "Incomplete details have been provided but our interpretation of FLT's trading update appears to suggest a large downgrade to consensus 1H25 and likely FY25 expectations," the analyst said in a note.
Flight Centre Q1 international growth offset by lower prices
The news: Flight Centre has flagged solid growth in international ticket volumes in its main Australian business during the September quarter but said this has largely been offset by lower prices.
The numbers: The travel agency is sticking to its forecast for normal industry growth over the full year with 4% to 5% growth in Australian outbound travel. It also reiterated ongoing focus on a 2% underlying profit before tax margin but said overall profit growth is the main priority.
The context: Flight Centre said trading in the three months to September remained marginally above figures a year ago across most key metrics of total transaction volumes, profit margin and underlying profit. However, it noted that it was too early to draw conclusions as to likely trading patterns over the year.
The company will update its market guidance at the annual general meeting on 14 November.
First quarter growth in its global corporate business was adversely impacted by airfare deflation and downtrading in some large accounts.
The company said there are positive early signs for October as it enters a seasonally busier trading period with leisure sales underway and corporate travel activity set to increase after the Northern Hemisphere holiday period. It is also continuing to monitor airfare price deflation given its impact on short-term time to value (TTV) growth.
The source: ASX announcement
