Why ARB, Domain, Redbubble, & Treasury Wine shares are sinking today

Redbubble Ltd (ASX:RBL) and Treasury Wine Estates Ltd (ASX:TWE) shares are two of four sinking lower on Tuesday. Here's why…

In afternoon trade the S&P/ASX 200 Index (ASX: XJO) has followed the lead of European markets and is pushing higher. At the time of writing, the benchmark index is up 0.6% to 6,909 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are under pressure:

ARB Corporation Limited (ASX: ARB)

The ARB share price is down over 2% to $38.25 following its half year update. For the six months ended 31 December, the 4×4 parts manufacturer reported a 21.7% increase in sales revenue to $283.9 million and a whopping 113.5% jump in profit after tax to $54 million. Investors may be disappointed with the company's decision to reduce its interim dividend payout ratio well below historical levels. It made the decision so it could increase its investment in the business for future growth.

Domain Holdings Australia Ltd (ASX: DHG)

The Domain share price is down 4% to $5.07. This follows the release of the property listings company's half year results this morning. Domain reported a 3.8% decline in revenue to $137 million. But thanks to a 14.5% reduction in operating expenses, it delivered a 52.5% jump in half year net profit to $19.4 million. Despite the strong profit growth, the Domain board opted to defer its dividend. Management also warned that operating expenses would grow over the full year.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has tumbled 16% lower to $5.85 despite delivering very strong first half profit growth. For the six months ended 31 December, the ecommerce company reported marketplace revenue growth of 96% to $352.8 million. This ultimately led to the company posting earnings before interest and tax (EBIT) of $41.8 million, which was a massive improvement over the loss of $1.9 million in the prior corresponding period. Possibly causing concerns for investors was news that customer orders were affected by COVID-19 constraints during December.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is down 4% to $9.74. Investors have been selling the wine company's shares ahead of its half year results release tomorrow. One broker that doesn't appear overly confident on the company is Citi. On Monday the broker reiterated its sell rating and $8.20 price target on the company's shares.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended ARB Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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