Azzet reports on three large caps trading double-digits lower after reporting updates today.
Wisetech Global tanks after a FY25 double miss
Despite management’s assertions that revenue will double in the year ahead, shares in Wisetech Global (ASX: WTC) were down over 10.2% by 1:30 pm AEST (3:30 am GMT) after the logistics software giant’s FY25 result failed to beat analysts’ expectations on FY25 revenue and profit growth.
While revenue rose 14% to US$778.7 million for the full year to June 30 - well short of the US$787.28 million analysts were expecting - net profit after tax rose 17% to US$200 million -well short of the US$220.6 million analysts’ expected.
On the back of this result, the company declared a final dividend of 7.7 cents per share, up 24% on the previous year.
In response to today’s double-miss, the company’s new CEO Zubin Appoo tried to point investors to earnings margins, which firmed 5 percentage points to 53% which he noted was ahead of expectations.
“Our margin performance highlights the underlying operating strength of the business and continued momentum we’re seeing with our new and existing Large Global Freight Forwarder customers, as they continue to consolidate and expand their use of the CargoWise application suite,” he said.
Appoo also tried to deflect fallout from today’s dismal result by highlighting the company’s forecast FY26 revenue of US$1.39 billion – US$1.44 billion, up 79-85%, and its expected underlying earnings of US$550 million – US$585 million, up 44 – 53%.
However, it’s not just the company’s financials that the market has had to contend with.
When founder and chairman Richard White recently handed over the reins to Appoo – one of his direct reports – due to the fallout of a recent sex scandal, industry fund HESTA told the market it was considering selling its holding based on the company’s perceived inability to deliver the necessary cultural change.
Other notable FY25 numbers:
- CargoWise revenue of $682.2 million, up 18%.
- Reported earnings of $381.6 million, up 17% on FY24.
- Operating cash flow of $436.5 million, up 25% on FY24.
- Free cash flow of $287.0 million, up 31%.
The company’s unsecured debt facility of US$327.3 million as at 30 June 2025 was replaced with a new, unsecured, US$3.0 billion syndicated debt facility to support the e2open acquisition, refinance existing debt, and provide additional liquidity.
Outlook
FY26 guidance is provided on the basis that market conditions do not materially change and is subject to the assumptions set out in the WiseTech Global FY25 Results presentation, including earnings margin rate dilution from the initial consolidation of e2open.
“We now have an opportunity to accelerate and drive a new era of growth through our focus on delivering new products for our customers that use disruptive technologies to drive efficiency and productivity,” said Appoo.
“With Container Transport Optimization, our expanded ecosystem with e2open, our new CargoWise commercial model, and additional value creation through deep AI workflow and management engine opportunity - we see an incredibly exciting future for WiseTech.”
But while the company has built its moat through its CargoWise platform - which has become deeply entrenched in the global logistics industry – the market appears to have registered uncertainty over the ability of the new management lineup to deliver.
Wisetech Global has a market cap of $32.4 billion; the share price is down 19% in one year and down 15% in the last week.
Consensus is Strong Buy.
Woolworths Group dives on dividend cut, core earnings hit
Shares in Woolworths Group (ASX: WOW) were down13.2% after the commentary that accompanied the retail giant’s lacklustre FY25 result gave precious little indication of growth in FY26.
Largely in line with the market’s expectations, group sales rose 2% to $69.1 billion, while underlying earnings fell 15% to $2.8 billion.
Reflecting lower earnings and higher net finance costs, normalised net profit fell 17.1% to $1.39 billion.
Primarily due to impairments associated with Big W, MyDeal and Healthylife, plus redundancy and restructuring costs as part of cost-saving initiatives, significant items amounted to $569 million.
Due to cost inflation, price investment, stock losses, and a shift to lower-margin own-brand products, Australian food earnings – the group’s profit engine - dropped 13%, while Big W posted a loss of $35 million compared to earnings of $14 million the previous year.
In response to today’s result, Woolworths slashed its final dividend to 45 cents per share, payable 26 September, down from 50 cents and a special dividend paid last year.
Putting a brave face on today’s market update, CEO Amanda Bardwell tried to reassure the market that it has taken action to reposition the group for long-term sustainable growth.
“While there is more to do and current trading remains below ambition, we have seen some early positive signs with improving customer scores,” she said.
Unsurprisingly, Bardwell said improving Australian supermarkets' food offer, returns at its struggling NZ supermarket division and Big W were among her highest priorities.
Outlook
In the first eight weeks of FY26, Australian Food (Woolworths Food Retail) total sales increased by 2.1% compared to the prior year.
Excluding tobacco, sales increased by 4.0% with total sales growth continuing to be driven by eCommerce.
NZ Food total sales growth in the first eight weeks has been impacted by short-term competitor promotional activity with sales increasing by 2.6%1.
Meanwhile, BIG W's total sales in the first eight weeks were broadly flat, cycling significant clearance activity in the prior year.
Bardwell expects FY26 to be a transitional year - focussed on rebuilding momentum and restoring customer trust – and guided to $400 million in above-store savings by the end of CY25.
“We expect Australian Food to return to mid to high single-digit reported EBIT growth in FY26 driven by progress on our strategic priorities, benefits of above-store cost savings, cycling one-off items in the prior year and a more stable operating environment,” she said.
“However, we are also facing some near-term challenges which will impact growth in F26 including a material acceleration in the decline in Tobacco sales expected to impact EBIT by $80 - $100 million, and approximately $60 million of costs related to the end-of-life replacement of core retail systems like UKG (Kronos Workforce Management).
Woolworths has a market cap of $35.4 billion; the share price is down 18% in one year and down 10% in the last week.
Consensus is Hold.
Domino’s Pizza tanks after recording maiden loss
Shares in Domino’s Pizza Enterprises (ASX: DMP) were trading 18.8% lower after the troubled pizza chain recorded an ominous milestone for shareholders: Its first-ever loss amounting to $3.7 million, after booking $121 million in one-off items.
By comparison, a year ago, the group reported net profit after tax of $92.3 million.
Equally disturbing for shareholders was the scalpel taken to the dividend, down to 21.5 cents – payable 3 October, from 50.4 cents last year.
While the one-time ASX darling pointed the market to solid performances in Australia and parts of Europe, the group continued to suffer major headwinds in France and Japan.
While today’s result came as no surprise to brokers, what gave them greater cause for concern was weak cash flow and rising leverage.
Executive chairman Jack Cowin - the major shareholder with 27% - tried to reassure the market that progress has been made in delivering cost savings, with initiatives underway to reinvest in marketing and franchisee support, while further simplifying the business.
“We’re taking action to make Domino’s a leaner, more efficient business,” Cowin said. “That means reducing costs”.
However, FY26 trading to date is less than encouraging; same-store sales for the first seven weeks of the 2025–26 financial year across the group were down 0.9%, while France and Japan were again a weak spot for the group.
What’s also weighing on the minds of investors was the recent decision by Cowin (83) to expand his role as chairman and also take on executive duties after the decision by Mark van Dyck to bail after less than a year in the top job.
Domino’s Pizza Enterprises has a market cap of $1.4 billion; the share is down 47% in one year and down 17% in the last week.
Consensus is Moderate Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
