Why did this ASX All Ords stock just crash 38%?

Investors are sending the ASX All Ords stock sharply lower on Monday.

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The All Ordinaries Index (ASX: XAO) is up a healthy 0.6% today, but this ASX All Ords stock isn't joining in the rally.

Quite the contrary.

In late morning trade on Monday, shares in the company – which is focused on the rental and sale of recreational vehicles and other tourism-related activities – are down a painful 37.6%.

The ASX All Ords stock entered a trading halt on Thursday pending an announcement it released today. Shares closed on Wednesday, swapping hands for $2.61. At the time of writing, shares are trading for $1.63 apiece.

Any guesses?

If you said Tourism Holdings Ltd (ASX: THL), go to the head of the virtual class.

Here's what the company reported this morning.

ASX All Ords stock under selling pressure

Investors are selling down the ASX All Ords stock after the company announced a sizeable reduction to its FY 2024 net profit after tax (NPAT) guidance.

It was only in February that management forecast Tourism Holdings would achieve a full-year NPAT of approximately NZ$75 million.

However, following a review of all its divisions, management reduced FY 2024 NPAT guidance to between $50 million and $53 million.

The reduced NPAT expectations hammering the ASX All Ords stock today were blamed on a weakening economy.

Tourism Holdings noted this "has impacted most regions and business divisions negatively and lowered expectations into Q4".

According to the company:

Vehicle sales have been a major factor globally, with sales volumes and margins now declining more quickly than expected in most markets.

Over 50% of the overall group earnings before interest and tax (EBIT) decline is attributable to the Australian Retail Dealership division and in particular, a shortfall in the sales volumes of high-margin ex-fleet vehicles.

Management said that while rental yields had generally met expectations, "a recent slowdown in forward booking intakes for the Australasian shoulder season will lead to a poorer rental performance than earlier forecasts" for the remainder of the financial year.

Looking ahead

Looking at what could impact the ASX All Ords stock over the longer term, the company is sticking to its goal of achieving a $100 million NPAT in FY 2026.

Management says it has "considered the assumptions underlying the goal and believe the goal remains appropriate based on a positive rental growth outlook and a recovery in the RV sales market globally".

The year ahead, however, looks like it could continue to be difficult for the ASX All Ords stock.

Tourism Holdings noted its expectations for FY 2025 are now below the FY 2023 pro forma NPAT of $77.1 million.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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