Flight Centre tanks as FY25 profit set to miss downgraded guidance
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More news: Flight Centre shares dropped in morning trade after the travel agency said it is set to miss its underlying profit guidance for the year due to continued volatility in the sector.
Shares were down 7.2% to $11.95 at 10:45am AEST, taking losses to 46% over the last 12 months.
RBC Capital Markets analyst Wei-Weng Chen noted Flight Centre's new profit estimate is a 7% miss to the mid-point of its updated guidance, which was downgraded in April, and a 25% miss to the mid-point of its original guidance set in November.
What they said: "While current softness in the travel market is well known to investors, we believe another FY25 downgrade, one month after balance date, will negatively surprise the market," said Chen.
"Weakness in the travel market this financial year is underscored by a 25% differential between the mid-point of Flight Centre's most recent guide ($290 million) and its original guidance provided in November ($385 million)."
Flight Centre to miss profit guidance, unveils Anthropic partnership
The news: Travel agency Flight Centre is set to miss its underlying profit guidance for the year, according to preliminary unaudited figures released this morning.
Flight Centre also today signed an agreement with Amazon and Google-backed AI company Anthropic, with the aim of delivering productivity gains and cost savings, including through the use of its AI chatbot Claude.
The numbers: Flight Centre expects underlying profit before tax to be between $285 million to $295 million, below its guidance range of $300 million to $335 million. The company is set to deliver full-year total transaction value of $24.5 billion, up 3.4% from $23.7 billion last year.
The context: Flight Centre said the expected decline in underlying profit follows a "challenging fourth quarter" and reflects underperformance and additional costs in Asia. The company also flagged the "significant impacts" of escalating tensions in the Middle East and the ongoing global downturn in bookings to the US.
Flight Centre said this volatility temporarily disrupted traditional travel and booking patterns during the company's peak trading period, as some customers chose to book closer-to-home overseas holidays or delayed finalising travel plans.
The company has consequently announced "targeted measures" to address short-term market volatility, aimed at cost optimisation, capital discipline, portfolio refinement and supplier partnerships. It plans to launch a leisure loyalty program in the first half of fiscal 2026 to deliver a "significant new revenue stream" and "superior customer experience".
The source: ASX
