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Highlights
- Trump’s tariff turbulence impacts Australian businesses.
- Offshore-focused companies face early earnings pressures.
- "Confession season" reveals more potential downgrades ahead.
Australian sharemarkets are bracing for a turbulent period as companies reveal the real impact of Donald Trump’s escalating trade policies and a softening global economy on their earnings performance.
Despite earlier attempts by corporate boards to downplay the noise around tariffs, recent trading updates show the effects are significant. Companies such as Flight Centre (ASX:FLT) and Brambles (ASX:BXB) provided early warnings this week, cutting expectations and highlighting a tougher operating environment.
Flight Centre (ASX:FLT) announced a sharp reduction in its full-year profit expectations, citing weaker international travel bookings, particularly to the United States. Managing Director Graham Turner acknowledged that leisure and corporate travel had softened across key markets like Canada, Australia, Europe, and Asia. Internal challenges were also noted, but the broader uncertainty created by U.S. political movements added considerable pressure. Notably, Flight Centre had already seen its shares fall 26.2% for the year before this revised outlook surfaced.
Brambles (ASX:BXB), a global leader in supply chain logistics, also delivered sobering news, trimming its sales growth expectations due to reduced consumer demand. Chief Executive Graham Chipchase pointed to "geopolitical environment and rapidly evolving tariff situation" impacting customer confidence across various regions. Although Brambles maintained its profit growth forecast, its stock faced one of the steepest declines in the S&P/ASX 200 index during early trade.
This reporting season, known informally as "confessions season," suggests that near-term earnings trends are skewing negative. Investors and analysts will be carefully observing updates over the coming weeks, especially as more companies reassess their forecasts for the 2025 financial year and beyond.
Particular attention is now on businesses that either have significant offshore revenue streams or were relying heavily on a strong second-half performance to meet annual targets. Aside from Flight Centre and Brambles, companies such as Johns Lyng Group (ASX:JLG), Cleanaway (ASX:CWY), Spark New Zealand (ASX:SPK), Stockland (ASX:SGP), The a2 Milk Company (ASX:A2M), Corporate Travel Management (ASX:CTD), Lovisa (ASX:LOV), BlueScope Steel (ASX:BSL), Fletcher Building (ASX:FBU), and Ramsay Health Care (ASX:RHC) are under the microscope.
As the global economic outlook dims — with growth projections trimmed to 2.1% for this year — Australia's corporate earnings landscape reflects a more cautious and volatile environment ahead. Next week’s trading updates at the Macquarie annual conference in Sydney are expected to provide further insight into how companies are adapting to these challenging conditions.
