07 Mar LET’S WRAP IT UP
The February earnings season is over, and Australian companies gave us a glimpse into how they are navigating tricky economic headwinds.
Cannings consultant Aileen Bodart has been delving deep and has come up with these three keys insights.
A big surprise this season was the resilience of consumers – we have continued to spend our dollars despite rising interest rates and high inflation. It explains why EFTPOS machine provider Tyro Payments reported a 37 per cent surge in transaction volumes in the last six months of 2022.
But while Aussie shoppers were spending up, they were becoming more value conscious. Results for the supermarket giants – Coles and Woolworths – showed consumers were swapping restaurants for home-cooked meals, jumping on discount offers, and purchasing more budget-friendly home-brand products.
Westfarmers-owned value retailers K-Mart and Target also saw more people coming through their doors, reporting a 24 per cent increase in revenue.
PRICES AND PROFITS
Companies that face little competition in their respective industries have reported healthy profits after using higher input costs to raise their prices.
Qantas turned around its multi-million-dollar loss this time last year into a billion-dollar profit thanks mainly to the hefty increases in airfares it introduced.
High oil and gas prices helped Woodside Energy’s profit triple to $9.6 billion in 2022 – that’s more than a million dollars a day!
And don’t forget the banks! CBA hit a record $5.15 billion profit as it passed on the RBA’s series of interest rate rises to home loan borrowers.
Some companies failed to satisfy investors and analysts, with nearly half the ASX 200 missing their earnings expectations – higher than the long run average of 30 per cent, according to the Australian Financial Review.
AGL Energy was among those that surprised the market by reporting an $87 million profit, far short of consensus estimates of about $160 million.
Long-time market darling Domino’s Pizza also shocked investors after its net profit slumped by more than a quarter and served earnings that were five per cent below expectations.