Flight Centre Limited (ASX:FLT) posted record annual transaction volumes on Wednesday but flagged a softer start to FY26, warning that geopolitical disruptions and weaker travel demand to the US and Asia will weigh on bookings in the near term.
Shares closed down 4.25% at $12.38 following the results, which were broadly in line with market expectations after the company issued pre-guidance last month.
Headline numbers
The company delivered record total transaction value (TTV) of $24.5 billion, up 3% on FY24. Underlying profit before tax (PBT) came in at $289.1 million, in line with last month’s downgraded guidance range, while statutory PBT slipped 3% to $213 million.
Revenue rose 1.1% to $2.78 billion, slightly ahead of estimates, and underlying earnings (EBITDA) totalled $448 million. The board declared a fully franked final dividend of 29 cents per share, taking full-year payouts to 40 cents, unchanged from FY24 but at a higher payout ratio.
Challenges weigh late in the year
After tracking ahead of FY24 through the third quarter, profit softened sharply in the fourth quarter of 2025. The group cited escalating tensions in the Middle East, weaker demand for US leisure travel and one-off issues in Asia, which together cut regional earnings by about $30 million.
In Australia, US bookings fell 11% in the June quarter, reversing earlier gains. The global corporate business also posted lower year-on-year profit, though management said it delivered growth when Asia’s losses were excluded.
Strategic response
Flight Centre has outlined measures to ride out the volatility, including cost optimisation to hold underlying expenses flat, a 15–20% cut to FY26 capex, and the closure or repositioning of under-performing units. It also flagged growth initiatives in AI, loyalty programs, and high-demand segments such as cruise and events.
Managing director Graham Turner said FY25 was “a more challenging trading period” after two strong post-COVID recovery years, but argued the headwinds “should not… prove to be long-term.” He added: “While we expect some ongoing turbulence early in FY26, we are also starting to see signs of stabilisation.”
Outlook and broker view
The company expects underlying PBT to be “reasonably flat” in the first half of FY26 before stronger profit growth in the second half as trading conditions improve.
Macquarie remains upbeat despite the softer guidance, reaffirming its outperform rating with a $15.20 price target, pointing to Flight Centre’s cost discipline, portfolio refinement and supplier relationships as key offsets to cyclical headwinds.