Latest / What the Flux / Universal Store's private strategy | James Hardie's valuation plummets 27% | Breville's caffeinated earnings

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Universal Store's private strategy | James Hardie's valuation plummets 27% | Breville's caffeinated earnings · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brettan, I'm justin. That's Friday, the twenty second of August. Wait.
• 0:10
  Speaker 1: We spoke last week about Combank's planting jobs and replace
• 0:13
  Speaker 1: them with AI, but now they've done a one eighty.
• 0:16
  Speaker 1: At first, Combank thought that an AI voice spot could
• 0:19
  Speaker 1: reduce calls to its human customer service by two thousand
• 0:22
  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
• 0:45
  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
• 0:50
  Speaker 2: the Flux app if you want to learn more.
• 0:51
  Speaker 1: Three mesmerizing stories today, Jazi boy, let's do it for
• 0:54
  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.
• 1:27
  Speaker 1: And that's no small feat in a retail market where
• 1:29
  Speaker 1: most players are crying poor.
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  Speaker 2: Yeap and b Man. Their profit wasn't left behind either.
• 1:34
  Speaker 2: It was up fifteen percent to nearly thirty five meal
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  Speaker 2: and a tidy dividend for investors.
• 1:39
  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
• 2:38
  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.
• 5:19
  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,
• 5:29
  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.
• 5:33
  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
• 5:45
  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.
• 5:59
  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.
• 6:05
  Speaker 1: Get this one. The coffee market is projected to almost
• 6:08
  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
• 6:13
  Speaker 1: or the higher input costs in the US, because those
• 6:16
  Speaker 1: are short term headwinds. But the long term story is
• 6:19
  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
• 6:37
  Speaker 2: used to sit around the three percent per annum and
• 6:39
  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,
• 6:45
  Speaker 2: so if you want to learn more about it, if
• 6:46
  Speaker 2: I'm smarter than your bus and make sure to check
• 6:48
  Speaker 2: it out and the Flux
• 6:49
  Speaker 1: Opp Thanks for listening and we'll see you on Monday.