Fannie Mae, Freddie Mac shares tumble after conservatorship comments
Investing.com -- Shares of Bunzl PLC (LON:BNZL) fell by 26% Wednesday following an unscheduled trading update and a profit warning for fiscal year 2025. The company highlighted a challenging trading environment and continued deflation as key factors impacting its performance.
Bunzl also reported a significant year-on-year (YoY) decline in operating profit for the first quarter, as well as margin pressure in its North American and Continental European markets.
The distributor of non-food consumable products, which had released its FY24 results in early March, has since experienced softness in key regions. The North American sector is grappling with a mix shift towards own brand products, customer loss, higher costs, and deflation.
These challenges have prompted Bunzl to lower its FY25 growth and margin outlook, resulting in expectations of consensus downgrades. Additionally, the company has paused its buyback program due to macroeconomic uncertainties.
In the first quarter of 2025, Bunzl’s group revenue grew by 2.6% at constant foreign exchange rates, but underlying revenue declined by 0.9%. Acquisitions, net of disposals, contributed to growth, while fewer trading days had a negative impact.
The company now anticipates moderate revenue growth for 2025, driven by announced mergers and acquisitions, with underlying revenue expected to remain broadly flat. This is a revision from previous guidance which projected robust growth with slight underlying revenue growth.
Operating margins are forecasted to be moderately below 8.0%, a decrease from the 8.3% reported in 2024 and earlier guidance.
Jefferies said it now sees ">5% downside to current consensus," indicating a more pessimistic outlook compared to market expectations.
Bunzl expects first-half 2024 margins to be around 7.0%, with second-half margins benefiting from corrective actions and seasonal trends.