Tougher than expected leisure markets in Australia and Canada are expected to see Flight Centre miss the top end of its targeted profit range for 2013/14, although it remains on track for a record year.
In a statement released to the Australian Stock Exchange, the retailer confirmed it expects to achieve a record underlying profit before tax in the order of $370 million to $380 million for the financial year to June – at the low to mid-point of current market guidance.
Managing director Graham Turner stressed those figures represent growth between 8% and 11% on the previous year, with many countries set to achieve record full year results including Australia, the UK and the US.
“Our ability to hit the top end of our targeted range has, however, been adversely affected by disappointing leisure travel results in Canada and a tougher trading environment for the large Australian leisure business during the past eight weeks,” he said.
The slowdown of Australian growth was most marked in May, corresponding with the “widely reported decline in consumer confidence”, he added.
“While demand often rebounds quite quickly after a short-term downturn in the leisure market, conditions are uncertain and it is obviously impossible to predict the timeframe for recovery,” Turner said.
However, he was optimistic that “highly affordable” international and domestic airfares would stimulate demand and a leisure travel rebound as travellers buy up deals.
