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Speaker 1: This is what the Flux. I'm Brett and I'm Justin

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Speaker 1: and it's Friday, the twentieth of February.

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Speaker 2: Dozzy boy. The unemployment rate for January has just come

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Speaker 2: out and it's unchanged at four point one percent, which

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Speaker 2: is a New York historic low. So the labor market

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Speaker 2: is looking uncomfortably tight and not exactly giving the RBA

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Speaker 2: the confidence that things are on the right track.

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Speaker 1: Going to be a very interesting cash rate next month.

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Speaker 1: Yep Man driven mean coins back in the day, or

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Speaker 1: we take a look back at the biggest mean coins

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Speaker 1: from twenty twenty one and how they're performing in twenty

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Speaker 1: twenty six. And let me tell you right now, the

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Speaker 1: five most popular ones aren't doing too well that. If

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Speaker 1: you want to learn more about how the mean coins

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Speaker 1: then are compared to now, make sure to download the

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Speaker 1: Flux app and check out our latest article.

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Speaker 2: Three Tremendous stories today, Juzzy boy, let's do it for

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Speaker 2: our first. West Farmers has posted a one point six

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Speaker 2: billion dollar profit jump as Bunnings and Lithium carry the load,

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Speaker 2: but Officeworks has run low on black inc.

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Speaker 1: Bunning's always hammering home the winds be me and so

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Speaker 1: tell me.

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Speaker 2: More So West Farmers is the Perth based conglomerate behind Bunnings, Kmart,

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Speaker 2: office works and price line.

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Speaker 1: It also owns chemicals and energy division through a web set.

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Speaker 2: Oh and a lithium business to power electric vehicles, because

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Speaker 2: why not when you're based in Wa.

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Speaker 1: And now to the numbers, be man. West Farmers sales

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Speaker 1: climbed three point one percent to over twenty four billion dollars.

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Speaker 2: But it wasn't just their sales and crew. Its net

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Speaker 2: profit increased more than nine percent to one point six

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Speaker 2: billion bucks for the half year to December.

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Speaker 1: Which was better than market expectations.

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Speaker 2: So who do you think carried the load here? JUSI boy?

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Speaker 1: Fair to say Bunnings went into beast mode with growth

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Speaker 1: in every category in every region.

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Speaker 2: And I believe some good news from its lithium operations too.

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Speaker 1: Yep. But interestingly it was the traditional retailers that underperformed.

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Speaker 2: That would be your targets, your office works.

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Speaker 1: Office works earnings film more than twenty one percent, fewer

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Speaker 1: home office upgrades, fewer color coded stationary hall But thankfully

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Speaker 1: for West Farmers, when one aisle slows down its earnings,

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Speaker 1: another one picks up the slack.

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Speaker 2: So what is The key learning here.

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Speaker 1: Earning's diversification is when a company makes money from lots

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Speaker 1: of different business units across different industries.

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Speaker 2: West Farmers has hardware, retail, discount department stores, offer supplies,

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Speaker 2: health and beauty, chemicals, lithium.

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Speaker 1: It's basically your fingers in every single shopping bag in Australia.

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Speaker 2: And US Boy. Because each division responds differently to economic conditions,

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Speaker 2: it reduces their risk of a total wipeout.

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Speaker 1: And Beman investors often place a premium on this kind

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Speaker 1: of earnings resilience.

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Speaker 2: Particularly during periods of economic uncertainty.

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Speaker 1: Compare that to a company that's more concentrated, like Mayer Yep.

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Speaker 2: If consumers stop splurging on apparel, there's really no at

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Speaker 2: hide and.

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Speaker 1: Recently that's chewed up in a pretty brutal share price slide.

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Speaker 1: My share price has plummeted forty three percent in the

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Speaker 1: last six months.

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Speaker 2: Meanwhile, Old Wessys has Bunnings on the tools and kmand

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Speaker 2: in the bargain bin and lithium in the ground.

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Speaker 1: For our second story, Zipco the buy now, pay later

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Speaker 1: so it shares crash more than thirty three percent yesterday

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Speaker 1: in one of the biggest sell offs in this reporting season.

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Speaker 2: You can defer your purchases, but you can't defer expectations,

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Speaker 2: Jessie boy, So tell me all okay.

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Speaker 1: So. Zip was founded in Sydney in twenty thirteen and

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Speaker 1: become one of Australia's early buy now, Pay later success stories.

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Speaker 1: It went toe to toe with after Pay during the

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Speaker 1: buy now, Pay later gold rush. Yeah, in fact be man.

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Speaker 1: At its peak during the pandemic, Zip's market value jumped

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Speaker 1: over ten billion dollars.

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Speaker 2: But now it is plummeted to just over one point

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Speaker 2: five bill including a thirty three percent drop yesterday.

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Speaker 1: All right to statman, tell me what spooked the market?

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Speaker 2: Well, Zip delivered growth, but not quite as strong as

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Speaker 2: analysts were hoping for.

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Speaker 1: We'd been talking total transaction value rising thirty four percent,

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Speaker 1: but still missed expectations by one percent.

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Speaker 2: We're also talking cash EBERDA jumping more than eighty five percent,

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Speaker 2: but five percent below what was forecasting.

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Speaker 1: And finally, it's net bad debts climbs one point seven

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Speaker 1: percent of their total transaction value, which most certainly sounded

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Speaker 1: the alarm bells for investors.

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Speaker 2: Put it all.

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Speaker 1: Together on boom worst day since twenty fourteen, investors sold

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Speaker 1: down the shares because the results didn't quite match their guidance.

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Speaker 2: So what's the key learning here?

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Speaker 1: In the share market, it's not just about whether a

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Speaker 1: company grows, it's at whether it grows as much as

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Speaker 1: people were expecting.

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Speaker 2: Before results come out. Analysts make forecasts about revenue and

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Speaker 2: profits and growth.

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Speaker 1: And here's the key partb Man. The share price already

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Speaker 1: factors in those expectations, so when the numbers are released,

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Speaker 1: they're judged against those expectations. So if revenue grow strongly

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Speaker 1: but not quite as strongly as predicted, that's still considered

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Speaker 1: a miss.

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Speaker 2: The bigger the gap between expectation and reality, the bigger

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Speaker 2: the reaction.

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Speaker 1: And Zipco missed on more than three of their key

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Speaker 1: metrics from their guidance, so a few small disappointments are

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Speaker 1: really added up.

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Speaker 2: And jazz boy, we've already seen this happen this reporting season.

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Speaker 2: Hello Temple and Webster.

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Speaker 1: They underlivered on their guidance. Next minute, share price whack

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Speaker 1: thirty percent as well.

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Speaker 2: So in a reporting season where investors are on edge

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Speaker 2: about AI eating the world, any miss is a big miss.

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Speaker 1: For our third and final story, Telstra has seen its

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Speaker 1: profit job eight percent after hiking prices on its mobile

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Speaker 1: plan and seeing the financial benefits of its major staff cutting, Big.

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Speaker 2: Tea enjoying a big win. Here, juzzy boy, what is

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Speaker 2: the latest? So?

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Speaker 1: Telstra is Australia's largest telco company.

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Speaker 2: In fact, it serves twenty five five and a half

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Speaker 2: million retail mobile services across Australia.

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Speaker 1: That's nearly one Telstra mobile service per Australian, including children

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Speaker 1: and jugubay.

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Speaker 2: Telstra's share price jump more than four percent after its

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Speaker 2: profit figures wet the appetite of some investors.

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Speaker 1: Yeah, get this. It's revenue barely increased in this half,

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Speaker 1: but it's profit that was another story.

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Speaker 2: Yep, Telster's profit jump more than eight percent two or

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Speaker 2: one point two billion bucks.

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Speaker 1: And where did this extra margin come from? B man?

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Speaker 2: Well, juzzy boy. Firstly, labor costs aka staff that dropped

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Speaker 2: by nine percent because of its six hundred and fifty

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Speaker 2: job cuts.

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Speaker 1: And then it also hiked the price of its postpaid

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Speaker 1: mobile phone plans.

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Speaker 2: And despite this price lift, it didn't seem to affect

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Speaker 2: their customer numbers.

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Speaker 1: Quite the opposite, actually, And that is what you call

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Speaker 1: strong pricing power, oh is it?

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Speaker 2: Juzzy boy? So what is the key learning here.

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Speaker 1: Pricing power is a company's ability to increase prices without

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Speaker 1: losing customers in large number.

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Speaker 2: And Juze Boy is one of the most powerful competitive

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Speaker 2: advantages in business.

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Speaker 1: Investors love that Telster proved it still had pricing power

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Speaker 1: in its mobile divisions.

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Speaker 2: Did this, It's postpaid average view per user or r

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Speaker 2: PO increased nearly four point eight percent, and.

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Speaker 1: It's still managed to grow its mobile customer base but

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Speaker 1: over five hundred and eighty thousand mobile services.

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Speaker 2: And that tells investors something pretty important. Customers value Telstra's

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Speaker 2: network enough to tolerate higher prices.

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Speaker 1: Yeah. So when revenue growth is limited, pricing power allows

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Speaker 1: companies to protect their margins and even grow profits in

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Speaker 1: a flat market. And then, man, we've seen this play

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Speaker 1: out globally with Apple and the iPhone yep.

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Speaker 2: Apple has steadily increased the price of its phones, yet

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Speaker 2: demand is still super strong.

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Speaker 1: So when customers feel locked into the product or service quality,

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Speaker 1: then they become a less sensitive to price. Doge coin,

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Speaker 1: sheiba enu hepe, Hadgi penguins, there are all some of

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Speaker 1: the mean coins that took off in twenty twenty one,

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Speaker 1: but how are they performing now? We do a deep

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Speaker 1: dive in the Flux app to tell you which ones

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Speaker 1: are still performing which ones are not, so make sure

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Speaker 1: to download the Flux app if you want to see

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Speaker 1: how your favorite mean coins are going.

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Speaker 2: Thanks for listening and we'll see you on Monday.