We're now in the final quarter of the year, which means we can expect the latest earnings updates from large-cap ASX shares.
Brambles Ltd (ASX: BXB) and Reece Ltd (ASX: REH) each reported on Thursday, and the market has spoken.
Reece shares are down nearly 7% at the time of writing, fetching $24.88 apiece, whereas Brambles is down 3% to trade at $17.97 apiece.
Here's a look at each company's report and what it could mean for investors considering these large-cap ASX shares.
Large-cap ASX shares report quarterly numbers
Brambles released its first-quarter FY25 trading update today with mixed results. Filings revealed a 3% increase in sales revenue to US$1.68 billion.
This growth came entirely from price increases on its product lines, many of which were implemented in FY24 and also in the current quarter.
Despite this, volumes were down, with Brambles booking a 1% decline in like-for-like sales volume. Management said this was due to this year's US Harvest and "more seasonal customer demand patterns in Australia".
The company, known for making CHEP pallets, booked 5% sales growth in its Americas division. But volumes were also down in the US.
The decline in demand from existing customers reflected an earlier US produce season bringing forward volumes to 4Q24 and broader macroeconomic conditions resulting in lower manufacturer and retailer inventory levels.
Investors have sold the large-cap ASX share today, bringing losses to more than 4% for the past month of trade.
Ord Minnett rates Brambles a buy with a $20.80 price target.
Reece reports sales amid softer market
The second large-cap ASX share is Reece. The plumbing and bathroom supplies company's first-quarter FY25 results told a similar story of challenging market conditions. Group sales dropped by 5% to $2.2 billion.
While the Australia and New Zealand (ANZ) market held steady, this was propped up by recent bolt-on acquisitions. Underlying sales volumes softened for the period.
Meanwhile, the US business struggled more significantly, with sales down 6.5% in US dollars. Management said this was affected by category deflation and "adverse weather conditions".
CEO Peter Wilson highlighted the tough trading environment during the company's 2024 AGM, pointing to challenging lead indicators in housing markets both in Australia and the US.
As we look ahead, the lead indicators continue to be challenging in both regions. While the US has seen its first rate cut, this will take time to work through the system.
We have a track record of investing through the cycle to build a stronger business for the long term. Despite recent softness, we continue to invest in growth and remain focused on strengthening our core capabilities and delivering our customer promise.
Reece forecasts $300 million to $320 million in pre-tax income for the first half of FY25, reflecting the tougher sales environment.
According to CommSec, consensus rates the large-cap ASX share a sell. This is made up of 8 sell ratings, two holds, and one buy.
Foolish takeaway
Brambles and Reece have both faced headwinds in their latest updates, leading to sharp declines in their share prices today. Both large-cap ASX shares have been under pressure in recent weeks.
Zooming out, Reece is up 40% in the past year, whereas Brambles is up 25%.
