What to view this reporting season: a primer

What to view this reporting season: a primer

Earlier this week we published our 2025 financial year (FY25) Reporting season calendar, so make sure you look at it. This makes a quick overview of what you could look at if the Australia FY25 reporting season starts.

Although stock markets have shown resilience throughout the year, this profit season can prove to be a bending point – one that will either confirm the trust whether the cracks will expose under recent optimism.

With the softening of economic growth and further interest rate relief probably, investors can demand more than headline profit per share (EPS) beats.

A primer: which reporting season means for investors

Every August, ASX-Genten companies with June-end issue their results on the entire year.

These announcements usually include financial data controlled, including income, profit and cash flow statistics, for FY25. They will also include dividend statements and capital management updates. But the most important thing is that CEOs will share their prospects for the coming year, including for some companies, FY26 guidance and trade updates for July and the first weeks of August.

It is this combination of backward and future -oriented data that investors give their most extensive health control on Corporate Australia.

Our expectations are:

1. Results will be assessed on more than just profit

FY25 income will not only be dissected for absolute growth, but also for how that growth was achieved. We expect investors to look beyond the head of the quality of income and questions:

• Does the top growth come from the price force or the volume recovery?
• Were margins protected by real productivity gain or short -term costs reductions?
• Do companies that show scale efficiency or mask weakness with accounting levers?

The bar always increases and investors will want to see that the sustainability of profit is not only a function of cost control – but of successful strategic and/or tactical execution in the midst of a more challenging environment.

2. FY26 Guidelines: credibility above optimism

It is always the case that the results are a look at the past. Last year’s figures should generally not be surprising, because if they were going, the company should ‘update’ the market during the confession season – the last part of June before books for the entire year are closed.

And so the Outlook statements with these results will have a disproportionate weight. Investors are usually skeptical about exaggerated bullish predictions, especially in a climate where household consumption slows, geopolitical risks are intensifying, monetary policy more accommodation and where Trump’s policy and their impacts are unpredictable.

Companies that describe their expectations with a mix of prices, volume and margin drivers will be rewarded with Investor Trust.

3. Capital management back in Focus

With the capital costs still increased and fragmentary economically visible, companies remain under pressure to demonstrate disciplined capital allocation.

Keep a lookout for sustainable dividend payment ratios, proof of stable or improvement of the efficiency-on-invested capital (ROIC) and wise Capex plans that are tailored to realistic growth processes.

In the meantime, boards that retain money buffers can be seen more favorably while retaining the returns of the shareholders than those who pursue aggressive growth at all costs. The exception is the company that shows solid growth and expresses confidence and a clear plan for continuous growth.

4. Sector spotlights

Retail & Consumer: Investors want to see how companies have managed promotional activities, stock levels and margin protection. High income with lower gross margins are generally rejected. And with consumers under pressure, signs of customer retention and digital involvement will be useful.

• Consumers manage the increasing costs by being more distinctive and again calibrating expenses:
  • Trade in Food & Liquor:
    • Shift to private label, online and alternative channels (eg bunnings for food).
    • Liqueur: lower price per unit and reduced participation of the category.
    • Categories that show discretionary spending characteristics.
  • Shifting to consumption at home while eating out, although later and less.
  • Acting in clothing and general merchandise.
  • Reducing big-ticket item purchases, affects retailers such as Harvey Norman (ASX: HVN) and The Good Guys (ASX: TGG).

JB Hi-Fi (ASX: JBH): JB Hi-Fi delivered a strong first half FY25 with a revenue growth of around 9.8 percent and eight percent profit growth, better than consensus, but the stock price fell by 16 percent in February and March-Misschien emphasized how premium ratings can produce amplified investor examination.

With its share price now too all time, investors expect the sustainability of the margin to dissect in the midst of promotion intensity, and whether the strong brand and cost control of the group can continue to stimulate profitability, in particular in the device segment. Any decrease in the average transaction size or like-for-like sales can express care.

In the quarter of March 2025, comparable sales rose six percent in Australia and 7.5 percent in New Zealand, which strengthens the momentum.

Wesfarmers (ASX: WES): With his diversified portfolio about bunnings, KMART and Officeworks, investors will assess how every division keeps it under a delaying consumer. The performance of bunnings on the market and do it yourself (DIY) segments will mainly signal.

Super Retail Group (ASX: SUL): Margins and customer retention in Rebel, BCF and Supercheap Auto are closely monitored, in particular in the context of inventory efforts and changing discretionary expenditure patterns.

Banks: Credit quality and Netto Rentemarge (NIM) trends are pre- and middle, in particular in the light of rising delinquencies and loan book stress in parts of the small to medium-sized company (SME) (real estate developer, cafés and restaurants) and mortgage market.

Commonwealth Bank (ASX: CBA) Remains a bellwether. The CET1 capital rose to 11.9 percent pre-dividend, with a payment of $ 3.8 billion in the first half of the financial year (H1)-a signal of capital strength in the midst of the profit growth of approximately four percent on an annual basis (YOY) in net interest income income

Sources: Relief of China’s demand and a flat to falling raw material prices force a renewed focus on cost control, capital returns and project discipline.

Technology: Unlike our American brothers, it seems that Australian investors demand their way to profitability. Cash combustion without clear evidence of the use of leverage or falling Churn rates are not acceptable.

Navigating by macro, regulating and geopolitical noise

Finally, companies are expected to speak directly about the external risks with which they are confronted, including geopolitical tensions, in particular those who influence trade and supply chains, domestic regulatory risks in sectors such as health care, education and gaming, and any valatility of the mock and inflation.

This reporting season could reveal which companies really have operational momentum and which are radiating. For investors this is a time to not only pay close attention to numbers, but also for nuance. The companies that come from this reporting season with resilient stock prices will probably be those those transparent reports to demonstrated growth and credible outlook.

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Roger Montgomery is the founder and chairman of Montgomery Investment Management. Roger has more than three decades of experience in fund management and related activities, including stock analysis, stock and derivative strategy, trade and effects. Prior to the establishment of Montgomery, Roger positions in Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

He is also the author of the best -selling investment guide for the stock market, value. Aabel-Hoe to appreciate the best shares and buy them for less than they are worth.

Roger regularly appears on television and radio, and in the press, including ABC Radio and TV, the Australian and Ausbiz. View upcoming media performances.

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