Flight Centre Travel Group Ltd (ASX: FLT) shares are taking a hit today.
Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed yesterday trading for $12.93. In morning trade on Wednesday, shares are changing hands for $12.25, down 5.3%.
For some context, the ASX 200 is up 0.2% at this same time.
This underperformance follows the release of Flight Centre's full financial year results (FY 2025).
Here's what's got investors spooked.
Image source: Getty Images
Flight Centre shares retreat on shrinking profits
Investors are bidding down Flight Centre shares today, with the company reporting a 10% year-on-year decline in underlying profit before tax (UPBT) to $289.1 million.
Statutory profit before tax came in at $213 million, which was down 3% from FY 2024.
On the positive side, Flight Centre achieved a record total transaction value (TTV) of $24.5 billion, up 3% year on year. And FY 2025 revenue of $2.78 billion was up 3%.
The company said it achieved this despite a challenging global trading cycle that included cautious consumers, geopolitical tensions, macro-economic uncertainties, and US-driven global tariff turmoil.
Underperformance and non-recurring costs in Asia also contributed to an approximately $30 million year-on-year earnings decline in the region.
On the passive income front, management declared a fully franked final dividend of 29 cents per share, down 3.3% from last year's final Flight Centre dividend.
What did management say?
Commenting on the results pressuring Flight Centre shares today, managing director Graham Turner said, "After two years of strong recovery post-COVID, FY25 proved to be a more challenging trading period."
Turner added:
The challenges we encountered should not, however, prove to be long-term headwinds…
While we expect some ongoing turbulence early in FY26, we are also starting to see signs of stabilisation, which mirrors our experiences after other cyclical downturns. Historically, travel has proven to be a resilient sector with a long record of year-on-year growth.
What's ahead for Flight Centre shares?
Looking at what could impact Flight Centre stock in the year ahead, the ASX 200 travel stock said it expects "the cyclical challenges" impacting its booking and travel patterns in FY 2025 to linger into the first months of FY 2026.
As such management expects first half UPBT to be "reasonably flat", with "accelerated profit growth" flagged for the second half as key projects gain momentum and the trading cycle is forecast to improve.
The company aims to provide FY 2026 market guidance at its Annual General Meeting on 12 November.
With today's intraday fall factored in, Flight Centre shares are down 37% since this time last year, excluding dividends.
