Flight Centre shares drop as profit guidance disappoints
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More news: Flight Centre shares lowered after the travel agency issued a softer-than-expected outlook for the first half of the 2026 financial year.
Shares were down 3.5% to $12.48 at midday AEST, having shed 35.4% over the last 12 months.
Jarden analysts said the FY25 result came in line with recent guidance, but the company's FY26 outlook looked softer. Flight Centre is targeting flat underlying profit before tax (PBT) in the first half of the year, compared to the market's expectations of 6% growth. This implies "mid-single digit 1H26 consensus cuts", the analysts noted.
What they said: "Overall we expect consensus cuts, with focus on pace of recovery into FY26 as the market improves," they said.
"Balance sheet remains strong, with buyback accretive — however, timing of any recovery has been pushed out again."
Flight Centre records 10% slide in full-year underlying profit
The news: Travel agency Flight Centre reported a 9.8% decline in full-year underlying profit before tax to $289.1 million, having initially targeted a range of $365-405 million before two rounds of guidance downgrades.
The numbers: Flight Centre told investors in July that it expected underlying profit before tax, the company's preferred profit measure, to be between $285 million to $295 million, following a "challenging fourth quarter".
The company has guided for "reasonably flat" underlying profit before tax in the first half of FY26, with accelerated profit growth in the second half.
Full-year total transaction value (TTV) of $24.5 billion marked a 3% uptick from $23.7 billion last year.
Flight Centre declared a total dividend of 40 cents per share, flat year on year, and above market estimates of 37 cents per share, according to Visible Alpha data.
The context: The company said it delivered record annual TTV amid a "challenging global trading cycle". Its peak fourth-quarter trading was impacted by escalating tensions in the Middle East, a global downturn in leisure travel to the US, and region-specific issues in Asia.
However, Flight Centre said those challenges are "largely cyclical" and likely to be "relatively short-term" with some early signs of stabilisation.
What they said: "After two years of strong recovery post-COVID, FY25 proved to be a more challenging trading period," said managing director Graham Turner.
"While we expect some ongoing turbulence early in FY26, we are also starting to see signs of stabilisation, which mirrors our experiences after other cyclical downturns."
The source: ASX
