Why is this $1.7 billion ASX 200 stock falling today?

Let's see why investors are hitting the sell button this morning.

| More on:
Three guys in shirts and ties give the thumbs down.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Bapcor Ltd (ASX: BAP) shares are getting a lot of attention on Wednesday.

In morning trade, the ASX 200 stock is down 1.5% to $5.11

Why is this ASX 200 stock pushing higher?

Investors have been buying the $1.7 billion automotive products retailer's shares on Wednesday following the release of a trading update ahead of its annual general meeting.

According to the release, the company has been focusing on simplification and the basics of running its businesses well. This is part of its aim to enhance growth, to re-set the cost base, and drive a more efficient business that benefits customers.

Management notes that the ASX 200 stock is well progressed on the operational improvements. Completion of the previously announced headcount reductions has occurred, and it has exited operations from a quarter of its planned warehouse consolidations to its central state based distribution centres.

These actions are expected to deliver savings of $20 million to $30 million in FY 2025. This is expected to be skewed to the second half. It notes that savings from the headcount reductions are coming through in the first half of FY 2025 and the savings from the distribution centre rationalisation will be weighted to the second half of the financial year.

What about its financial performance?

Bapcor's performance has been a touch disappointing so far in FY 2025. The release reveals that the ASX 200 stock's total revenue at 30 September was up 0.7% over the prior corresponding period.

This is a significant deterioration on its performance early in the first quarter. When Bapcor released its full year results in August, it advised that group total revenue for the first five weeks of FY 2025 was up 7.7% and up 1% on a like for like basis. Clearly the rest of the quarter since that release has been much tougher.

Management notes that Bapcor's Australian trade and Specialist Networks businesses are performing well. However, the retail environment, and its performance in it, continues to be more challenged.

Based on this subdued start to the financial year, investors appear concerned that FY 2025 could be another disappointing year for the company. As a reminder, in FY 2024 Bapcor reported a statutory loss of $158.3 million and a 24.3% decline in pro forma net profit after tax to $94.8 million.

Following today's decline, this ASX 200 stock is now down 24% since this time last year.

More on Share Market News

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 made it three-for-three losses in a row this Wednesday.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

Guess which ASX 200 stock was just upgraded to a buy rating

Why did the broker just turn bullish? Let's find out.

Read more »

Man on a laptop thinking.
Share Market News

Why is the ASX 200 having such a bad day on Wednesday?

Several factors are at play.

Read more »

Four young friends on a road trip smile and laugh as they sit on roof of their car.
ETFs

4 popular ASX tech ETFs smashing new all-time highs today

Do you own any of these lucky ETFs?

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Brickworks, James Hardie, Megaport, and OFX shares are charging higher today

These shares are having a good time on hump day. But why?

Read more »

A man with his back to the camera holds his hands to his head as he looks to a jagged red line trending sharply downward representing the ASX tech share sell-off today
Share Fallers

Why Insignia, Light & Wonder, Mineral Resources, and Nuix shares are sinking today

These shares are having a difficult time on hump day. But why?

Read more »

A view from the track behind a runner in the starting block.
Opinions

3 beginner-friendly ASX shares perfect for Aussie investors starting out in November

Here’s why I like the look of these ASX shares for beginners.

Read more »

A group of business people pump the air and cheer.
Mergers & Acquisitions

This ASX small-cap stock is exploding 75% on takeover news!

The takeover premium is large.

Read more »