Company Reports

Reece's fiscal 2026 constant-currency sales of AUD 9.4 billion were 7% higher than the prior year. But 10% higher group costs, driven by digital and technology spending and employee costs and incentives, underpinned flat EBITDA of AUD 901 million. Shares lifted 2% on Aug. 24.

Reece operates two distinct business segments: Australia and New Zealand, and the US.

Reece operates two distinct business segments: Australia and New Zealand, and the US.

Reece shares have recovered after a short-term blip amid inflation worries following the commencement of the Iran war. Despite being very volatile, shares are roughly flat with a year ago.

Reece's first-half fiscal 2026 EBIT of AUD 262 million was 14% lower year on year. Revenue, 6% higher, was supported by new-store growth. A 130-basis-point EBIT margin decline was due to higher operating costs, mostly to support its store expansions. Shares rose about 15%.

Reece operates two distinctly different business segments: Australia and New Zealand and the United States.

Reece operates two distinctly different business segments: Australia and New Zealand and the United States.

Reece provided a trading update at its AGM. First-quarter fiscal 2026 EBITDA of AUD 222 million was 8% lower than the prior year due to rising costs led by higher wages and investment in branch growth. These headwinds more than offset 6% higher revenue in constant currency.

Reece has announced an off-market buyback of up to AUD 400 million. Shares are to be bought at between AUD 11 and AUD 13 per share, offering a premium of between 7% and 26% of the undisturbed share price, before the announcement.

Reece operates two distinctly different business segments: Australia and New Zealand and the United States.

Reece's fiscal 2025 EBIT of AUD 548 million was 20% lower than the prior year. Revenue was flat at AUD 9 billion, including contributions from 4% more branches in its Australia, New Zealand, and US locations. Shares fell about 16% on the day.

Reece has provided a trading update for fiscal 2025. EBIT guidance of between AUD 548 million and AUD 558 million reflects weak residential sales conditions in its main markets of Australia and the US. Shares fell 19% on the news.

Reece operates two distinctly different business segments: Australia and New Zealand, or ANZ, and United States, or US.

US President Trump temporarily lowered tariffs to 10% on most ex-China US imports for a three-month period while countries seek to negotiate. But China is facing an even higher 145% tariff. Most ANZ industrial shares rallied, returning to, or nearing, pre-"liberation day" prices.

Economic uncertainty around US tariffs is adding to the challenging outlook management pointed out in the first-half fiscal 2025 earnings result. Reece noted demand for plumbing products is being negatively affected by higher mortgage rates and affordability issues.

No-moat Reece’s first-half fiscal 2025 earnings is a miss, in our view. Revenue of AUD 4.4 billion was 3% lower than the same period in fiscal 2024, driven by 6% lower sales in the US and flat in Australia and New Zealand. Group EBIT of AUD 305 million was 17% lower than last year with costs hit by inflation, and higher depreciation following the rebrand of US stores.

Reece operates two distinctly different business segments: Australia and New Zealand, or ANZ, and United States, or US.

Reece's start to fiscal 2025 is more challenging than we expected. First-quarter fiscal 2025 US sales are about 7% lower than the prior corresponding period on a constant currency basis. Sales volumes are lower, and pricing is under pressure, reflecting the lack of competitive advantages Reece has in the US. Australia and New Zealand revenue was broadly flat with the PCP. The company has guided fiscal 2025 first-half adjusted EBIT of AUD 300 million to AUD 320 million.

Reece operates two distinctly different business segments: Australia and New Zealand, or ANZ, and United States, or US.

The US segment held its own in Reece's fiscal 2024 results. While the Australian business' earnings were flat, group-adjusted EBITDA and revenue were 5% and 3% higher, respectively, than the previous corresponding period due to sales growth and margin improvement in the US.