The Flight Centre Travel Group Ltd (ASX: FLT) share price is taking a tumble today.
Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed on Thursday trading for $12.46. In morning trade on Monday, shares are swapping hands for $12.01 apiece, down 3.6%.
For some context, the ASX 200 is up 0.9% at this same time.
Here's what's happening.
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Flight Centre share price slides alongside profit forecast
The Flight Centre share price is facing both headwinds and tailwinds from an announcement released this morning.
Turning to the headwinds first, the ASX 200 travel share downgraded its 2025 fiscal year (FY 2025) profit guidance.
The culprit for the downgrade was reported to be shorter-term volatility spurred by uncertain trading conditions, which the company said includes the recent changes to United States trade and entry policies.
Flight Centre said it was still on track to deliver record total transaction value (TTV) in FY 2025.
But with the uncertainty coming during its busiest trading months of May and June, management said the company is now unlikely to deliver the 14% to 26.5% year-on-year growth needed to achieve its prior FY 2025 guidance of a $365 million to $405 million underlying profit before tax (UPBT).
FY 2025 UPBT guidance was downgraded to between $300 million and $335 million.
But it's not all bad news.
The Flight Centre share price should get some support with the company highlighting that it continues to:
- Generate solid monthly profits
- Maintain a strong balance sheet and liquidity position with increasing cash reserves and access to undrawn debt facilities
- Have a positive medium to long-term outlook in a resilient sector
In a move likely to please current shareholders, the board announced an up to $200 million on-market share buyback. That's set to start on or about May 12.
What did management say?
Commenting on the range of factors impacting the Flight Centre share price, managing director Graham Turner said, "While FY25 has been a turbulent year, our fundamentals are strong, and we are well placed to deliver more rapid growth and enhanced shareholder returns next year and into the future as the trading cycle stabilises."
Turner added:
Group-wide, we are maintaining cost discipline and implementing strategies to boost productivity and enhance the customer experience. Importantly, we are also maintaining a very strong balance sheet…
The $200 million buy-back we have just announced underlines both our belief in the strength of our business and our commitment to enhancing shareholder returns.
With today's intraday fall factored in, the Flight Centre share price is down 43% since this time last year.
