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Speaker 1: This is what the Flux.

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Speaker 2: I'm Brettan, I'm justin. That's Friday, the twenty second of August. Wait.

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Speaker 1: We spoke last week about Combank's planting jobs and replace

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Speaker 1: them with AI, but now they've done a one eighty.

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Speaker 1: At first, Combank thought that an AI voice spot could

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Speaker 1: reduce calls to its human customer service by two thousand

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Speaker 1: calls a week, but it seems like calls have actually increased.

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Speaker 1: So now CBA with its tail between its legs once

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Speaker 1: it's old staff back man.

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Speaker 2: The other week, the Reserve Bank in Australia delivered ossies

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Speaker 2: with good news with the third rate cut of the year,

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Speaker 2: but that came with not so good news of a

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Speaker 2: reduced productivity forecast. What does that mean and how does

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Speaker 2: that work in Australia. We do a big deep dive

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Speaker 2: in the Flux app covering slowing productivity and what it

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Speaker 2: means for the future of Australia. Make sure to download

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Speaker 2: the Flux app if you want to learn more.

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Speaker 1: Three mesmerizing stories today, Jazi boy, let's do it for

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Speaker 1: our first Universal store has seen its sales jump nearly

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Speaker 1: sixteen percent thanks to its private brand strategy.

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Speaker 2: Retail Fashion eight meant to be this upbeat in twenty

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Speaker 2: twenty five, b Man. But Universal Store is proving otherwise.

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Speaker 2: So what is happening here?

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Speaker 1: Okay? So Universal Store is an ossie youth apparel retailer

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Speaker 1: that was founded back in nineteen ninety nine.

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Speaker 2: Competes with the likes of General Pans the iconic Glue Store.

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Speaker 1: And since its launch it has grown to over one hundred.

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Speaker 2: Stores now, bimn. Universal was just released its annual sales,

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Speaker 2: which jumped fifteen and a half percent to over three

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Speaker 2: hundred and thirty three million dollars.

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Speaker 1: And that's no small feat in a retail market where

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Speaker 1: most players are crying poor.

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Speaker 2: Yeap and b Man. Their profit wasn't left behind either.

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Speaker 2: It was up fifteen percent to nearly thirty five meal

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Speaker 2: and a tidy dividend for investors.

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Speaker 1: Interesting call Jazzy Voice.

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Speaker 2: What was the driver of this growth, Well, it wasn't

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Speaker 2: its private label brand Thrills, which really really struggled. It

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Speaker 2: was its other private label brands, one called Perfect Stranger,

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Speaker 2: which grew eighty three percent from last year.

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Speaker 1: As well as growth in other private label brand in

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Speaker 1: Neo Vision.

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Speaker 2: Those brands were stocked but also incubated within the og

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Speaker 2: Universal Stores. Now they have their own standalone stores too,

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Speaker 2: and the man at Universal wants to keep growing its

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Speaker 2: private label store footprint to even tasty imagins.

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Speaker 1: Interesting, So what is the key learning here?

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Speaker 2: Retailers are no longer just selling brands. They're incubating them

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Speaker 2: and then sending them off to become their own standalone stars.

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Speaker 1: The retailer starts by stocking private label brands in store.

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Speaker 2: And those brands get a built in distribution model, They

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Speaker 2: see extensive data, and they get an instant customer base, and.

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Speaker 1: Then, if successful, the retailer can spin the winners into

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Speaker 1: their own stores.

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Speaker 2: Universal Store did this with Perfect Stranger, which began as

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Speaker 2: a label within Universal Stores and now has nineteen outlets

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Speaker 2: of its own.

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Speaker 1: And Juzy Boy k Mart. That's right, k Mart pulled

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Speaker 1: the same trick with Ancho Anko. The brand already has

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Speaker 1: standalone stores in the Philippines and also sells the Ancho

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Speaker 1: brand into Walmart Canada.

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Speaker 2: In fact, be Man, the Ancho brand is valued at

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Speaker 2: more than eight billion dollars alone according to Jarden analysts.

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Speaker 1: So Juzy Boy, while the private label model has become popular,

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Speaker 1: it looks like the next version is the private label,

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Speaker 1: evolving into a stand alone label.

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Speaker 2: M M for our our second story. James Hardy has

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Speaker 2: seen its share price plummet twenty seven percent after it

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Speaker 2: missed earnings across pretty much every single metric.

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Speaker 1: Talk about the walls crashing down for Jimmy, what's going

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Speaker 1: on here?

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Speaker 2: Okay? Jimmy Hardy aka James Hardy is the enormous Australian

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Speaker 2: buildings material company.

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Speaker 1: And it has become the largest manufacturer of fiber cement

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Speaker 1: products globally.

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Speaker 2: External cladding, cement sheets, insulation pipes.

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Speaker 1: Aka the skeleton and skin of buildings, and juzy Boy.

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Speaker 1: While it was once infamous for asbestos litigation, James Hardy

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Speaker 1: has turned itself into a market darling doubling in value

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Speaker 1: between twenty twenty two and twenty twenty four.

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Speaker 2: Until this week's earnings shock yep, James Hardy's revenue of

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Speaker 2: nine hundred million US dollars fell well shot of the

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Speaker 2: nine hundred and fifty three million usd that was expected.

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Speaker 2: On top of that, it's adjusted eber dart dropped twenty

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Speaker 2: one percent to two hundred and twenty six million US

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Speaker 2: dollars and juz Boy.

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Speaker 1: This is a very big miss.

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Speaker 2: Particularly since Just a few months ago, the James Hardy

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Speaker 2: management team shared a fairly rosy picture about its product

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Speaker 2: sales in the US.

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Speaker 1: But with this mist the cracks in the walls are

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Speaker 1: starting to show and investors have jumped ship.

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Speaker 2: So what is the key leading here?

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Speaker 1: Investors don't just punish week results, they tend to punish

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Speaker 1: weak levels of company trust.

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Speaker 2: James Hardy's numbers were pretty done ugly, but the bigger

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Speaker 2: blow was the James Hardy management team losing credibility with investors.

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Speaker 1: You see, guidance is meant to be the blueprint for

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Speaker 1: investor expectation.

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Speaker 2: Investors and analysts use their previous financial results plus the

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Speaker 2: guidance to model out what they think the business should

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Speaker 2: or could beware.

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Speaker 1: But when you provide guidance, you also have a responsibility

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Speaker 1: not to mislead the market. And based on James Hardy's

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Speaker 1: previous guidance, analysts had expected profit numbers twenty percent higher

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Speaker 1: than where they actually landed.

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Speaker 2: So be man. It's no surprise that James Hardy's share

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Speaker 2: price took a complete belting.

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Speaker 1: But investors are now starting to question their trust of

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Speaker 1: the management team.

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Speaker 2: Overall, not angry, just very very disappointed.

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Speaker 1: The worst kind.

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Speaker 2: For our third and final story, Brevel's big bet on

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Speaker 2: coffee has brewed nicely in China and the Middle East.

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Speaker 2: It's revenues perked up nearly eleven percent over the last

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Speaker 2: financial year, and.

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Speaker 1: You didn't even mention their new four thousand, five hundred

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Speaker 1: dollars coffee machine. Judge boy, what is going on here?

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Speaker 2: Okay? So Brevyl is the ossy small appliance maker. It's

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Speaker 2: famous for making premium coffee machines.

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Speaker 1: Not quite as fancy as Lamazoco, not quite as pod

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Speaker 1: poppy as an espresso.

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Speaker 2: But definitely better than your trusty nes Cafe Blend forty three.

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Speaker 2: Don't bag Nest Cafe Blend forty three. Now, Brevell has

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Speaker 2: just announced that their FY twenty five revenue jumped almost

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Speaker 2: eleven percent to one point seven billion dollars. And be men,

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Speaker 2: they ebit jumped ten point two percent, which meant they

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Speaker 2: hit the top end of their guidance.

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Speaker 1: Unlike another company we've spoken about on the Pod today,

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Speaker 1: the b Man, about forty percent of sales for Brebel.

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Speaker 2: Comes from the US, so Trump's tariffs are really stinging.

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Speaker 1: But the Brevel crew ain't too worried because there's still

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Speaker 1: growth from China and the Middle East, and don't forget the.

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Speaker 2: Rest of the whole darn world who are becoming coffee snobs.

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Speaker 1: That's true, there's a significant tailwind for Brevell and it's

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Speaker 1: new four thy five hundred dollars coffee machine.

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Speaker 2: So what is the key learning here?

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Speaker 1: Category tailwinds can turn a good company into a great one.

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Speaker 2: When human behavior shifts strongly in one direction, businesses ride

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Speaker 2: the wave of the whole categories expansion.

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Speaker 1: Get this one. The coffee market is projected to almost

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Speaker 1: double in size by twenty thirty five, which is exactly

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Speaker 1: why berevol isn't losing too much sleep over Trump's tariffs

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Speaker 1: or the higher input costs in the US, because those

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Speaker 1: are short term headwinds. But the long term story is

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Speaker 1: pretty down appealing.

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Speaker 2: Yep. You've got a group of millennials and coffee officionados

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Speaker 2: that are taking their coffee drinking very seriously.

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Speaker 1: Arguably more seriously than their local barista.

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Speaker 2: Yep. And that's why savvy investors look not just at

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Speaker 2: a company in isolation, but the long term prospect of

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Speaker 2: the industry. Plats am, Did you know Australia's productivity rate

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Speaker 2: used to sit around the three percent per annum and

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Speaker 2: now we're forecasters to drop that to less than one percent.

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Speaker 2: We cover it all off in the Flux app today,

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Speaker 2: so if you want to learn more about it, if

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Speaker 2: I'm smarter than your bus and make sure to check

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Speaker 2: it out and the Flux

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Speaker 1: Opp Thanks for listening and we'll see you on Monday.