Top stories and takeaways from another week of ASX earnings
ASX200 heavyweights BHP, Wesfarmers, Woolies and Coles were among the companies to report.
Mentioned: Coles Group Ltd (COL), Tyro Payments Ltd (TYR), Endeavour Group Ltd (EDV), Guzman y Gomez Ltd (GYG), BHP Group Ltd (BHP), Kogan.com Ltd (KGN), NIB Holdings Ltd (NHF), NVIDIA Corp (NVDA), Wesfarmers Ltd (WES), Woolworths Group Ltd (WOW)
ASX reporting season reached its crescendo this week as several big hitters announced their results. Here are some of the week's biggest headlines, as well as links to articles sharing our analysts' thoughts.
Coles Group (COL)
Coles reported better profit margins in its core supermarket business, thanks in part to its investments in theft prevention technology. The company also reported a 30% jump in online grocery revenues and benefited from a shift to higher-margin revenue from advertising and non-tobacco products.
Woolworths (WOW)
A challenging trading environment took its toll on Woolworths. Group earnings for fiscal 2024 were 1% lower than the prior year as a good showing from its core food business was offset by weaker trading in smaller segments like its Big W department stores.
Wesfarmers (WES)
The conglomerate’s fiscal 2024 net profits increased by 4% to AUD 2.6 billion. This was roughly in line with our analyst Johannes Faul’s expectations, but the company reported an unexpectedly soft start to fiscal 2025.
A standout from the 2024 financial year was Kmart, which performed far better than Big W and fellow Wesfarmers business Target. Meanwhile, Bunnings sales were impacted by subdued DIY demand and lower construction activity as the wait for interest rate cuts continued.
BHP Group (BHP)
BHP reported 4% higher earnings before interest, taxes, depreciation and amortisation (“EBITDA”) than the previous year and modestly higher net profits.
The company’s USD 29 billion in EBITDA was slightly below Jon Mill’s forecast as higher prices and favorable foreign exchange rates were partially offset by increased unit cash costs. See why BHP earnings exhibited several reasons that Mark avoids miners.
NIB Holdings (NHF)
It was a miserable Monday for NIB, as margins in its healthcare insurance business fell more quickly than markets expected. As a result, the company reported a big miss on earnings and the shares fell 17%.
Endeavour Group (EDV)
Endeavour's 2024 results were solid but the company reported a softer than expected start to the new financial year. The shares took a tumble in response. Go here to see why our analysts think the sell-offs in NIB and Endeavour were both overdone.
Tyro Payments (TYR)
Tyro's earnings beat estimates thanks to higher merchant fees and interest income. Morningstar’s Shaun Ler liked a lot of what he saw in the company’s report, but he didn’t join markets in cheering the earnings beat. Read this article to see why.
Kogan.com (KGN)
Markets already knew roughly what to expect from Kogan’s results but better than expected adjusted earnings and a higher dividend led the shares higher. Johannes Faul said that while Kogan seems to be building momentum, his previous forecasts may have been a touch optimistic. Read more here.
Guzman y Gomez (GYG)
ASX newbie Guzman’s 2024 results were well telegraphed, but a good start to the new financial year saw the shares continue their rise.
After 8% higher like-for-like sales in fiscal 2024, GYG recorded 7% growth in the first few weeks of fiscal 2025. Our analyst Johannes Faul was impressed by the results but maintained his view that the shares are overvalued. Read more here.
Meanwhile in the US…
Nvidia (NAS: NVDA) shares stumbled despite posting strong revenue growth. Our Nvidia analyst Brian Colello maintained his Fair Value estimate and says the firm’s AI tailwinds look likely to remain in place for some time. Read more here.
Articles mentioned:
- Have these ASX earnings losers fallen too far?
- Markets confused by ASX share's earnings beat
- BHP earnings highlight all the reasons I don't invest in miners
- No sign of AI slow down for Nvidia
- Strong results from IPO bolter not enough to change our view
- Has this undervalued ASX share finally turned a corner?