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AUGUST 2025 – ISSUE 24

August 2025

Reporting Season

The 2025 August Reporting Season again led to earnings revisions. The FY 2026 Estimated EPS Growth for the S&P ASX300 was downgraded by 110bps1, which directionally is typical but somewhat above the historical average of ~70bps2. EPS growth now stands at an anaemic estimated 4.4%3 for the S&P ASX300.

In terms of price action, the market was again brutal and consistent with recent reporting periods. Elevated volatility around results has become entrenched, both for companies where results exceeded analysts’ expectations and for companies that disappointed.

In August the S&P ASX300 Index returned 3.16%4, with steady performance exhibited throughout the month.

The Australian consumer and the American consumer remain resilient. Consumer spending in both geographies is strong.

Interestingly, and somewhat perversely, housing construction and renovation remains tepid in both Australia and America.

From a Platypus perspective the effects of the introduction of across-the-board American tariff increases were as expected. With bottom-up modeling reflecting the impacts of tariffs on companies we modeled that export to the USA.

Australian banks remain well supported. Net Interest Margins for the banks as whole were stronger than estimated, giving the sector a boost in terms of earnings and subsequent share prices.
Somewhat surprisingly the Platypus portfolio lost six5 CEOs in reporting season (or leading into it) to resignation/retirement, which were replaced by able internal or external successors. We gained one back with CAR Group Ltd (CAR) CEO appointed to the lead REA Group Ltd (REA).

Platypus had 23 portfolio companies report earnings in August. There were 4 companies that delivered disappointing results and 4 delivered oustanding earnings. The balance reported solid and results that were ‘as expected’.

Those that delivered disappointing results were, in general, dealt with harshly in August 2025. From a market perspective these include CSL Limited (CSL) -21.47%, Woolworths Ltd (WOW) -8.40%, Endeavour Group Ltd (EDV) -7.28%, James Hardie Industries plc – 26.49% and Reece Limited (REH) -17.33%.

Companies that delivered stand-out earnings results performed well. These included Life 360 Inc (360) +19.54%, Charter Hall Group (CHC) +15.93%, Coles Ltd (COL) +15.64%, Harvey Norman Holdings Ltd (HVN) +20.03% and Lovisa Holdings Ltd (LOV) 29.08%.

At Platypus we believe share prices follow earnings growth. The Platypus Portfolio has estimated EPS growth6 for FY 2026 of 13.5%, the S&P ASX300 stands at 4.4%. We continue to look for those companies that will deliver earnings growth and we are agnostic as to whether such earnings growth is structural or cyclical. However if the earnings growth is cyclical we need see some duration to the cycle.

 

Transport

1. Factset/Platypus, 2. Factset/Platypus, 3. Factset/Platypus, 4. Factset, 5. 360, CAR, JBH, LOV, REA, TLC, 6. Platypus

Disclaimer:

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