Webjet Group Ltd (ASX:WJL) has warned that softer domestic leisure travel and a shift towards cheaper short-haul Asian holidays will weigh on earnings in FY26, with profit now expected to come in up to 21% below market consensus.
In early trade, shares in Webjet (ASX: WJL) slumped by almost 22% to $0.68.
Earnings down
In preliminary results for the half-year to September 30, the company flagged earnings of $14.4 million, down 9% on the prior corresponding period. It expects full-year earnings of $30–32 million, representing a decline of 9–14%.
In an update to the ASX, Webjet said underlying first-half performance was broadly in line with its own expectations, highlighting resilience in a difficult trading environment. It cited heightened tensions in the Middle East, tariff-related trade disruptions in April, cost-of-living pressures and elevated domestic airfares as key headwinds.
Skewed demand
The company’s online travel agency reported solid demand for international outbound travel but said bookings were skewed towards “lower-revenue short haul Asian destinations rather than higher revenue long-haul destinations to Europe and North America”.
Lower domestic bookings were the main driver of the earnings decline versus the first half of FY25; however, statutory net profit after tax rose 16% to $6.2 million.
RBC Capital Markets analyst Wei-Weng Chen said investors were likely to take a sceptical view of the update. “Management are expecting full year earnings to be down 9 to 14% however this update is closer to a 16 to 21% downgrade versus consensus expectations of $38 million,” Chen said.
“The downgrade is even larger when considering that Locomote, a recent acquisition, is expected to generate underlying earning losses of $600,000 to $900,000 in the second half of the 2026 financial year. These losses have been excluded from guidance.”