Latest / What the Flux / Woolworths cuts 2026 profit forecast | Bega Group's TikTok luck | Alphabet smashes as Google Search holds

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Woolworths cuts 2026 profit forecast | Bega Group's TikTok luck | Alphabet smashes as Google Search holds · What the Flux

• 0:05
  Speaker 1: This is what the Flux I'm Brett ad I just
• 0:07
  Speaker 1: said and it's Friday, the first of May.
• 0:09
  Speaker 2: Josie Boy. We knew that the two cash rate hikes
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  Speaker 2: this year so far we're putting stress on Ossie households,
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  Speaker 2: but we didn't know how much. Get this one. More
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  Speaker 2: than one point four million homeowners in Australia are feeling
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  Speaker 2: the stress of being on the property ladder. That's more
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  Speaker 2: than twenty five percent of mortgage holders at risk of
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  Speaker 2: mortgage stress, according to Roy of Morgan. And next week
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  Speaker 2: the RBA is weighing up potentially another high.
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  Speaker 1: Don't do it, RBA Foxman speaking of the rate hike
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  Speaker 1: next week on Tuesday, the Reserve Bank of Australia will
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  Speaker 1: be dropping potentially another rate hike or a rate pause
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  Speaker 1: and we'll have it covered from all angles in the
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  Speaker 1: Flux app. So if you want to know at two
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  Speaker 1: point thirty on the dot what the RBA's decision was,
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  Speaker 1: make sure you're in the Flux app for the latest updates.
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  Speaker 2: Three dynamic stories today, Juzzy boy, let's do it for
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  Speaker 2: our first. Woolworths has cut its twenty twenty six profit
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  Speaker 2: forecast despite sales increasing almost six percent last.
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  Speaker 1: Quarter more grocery s through its checkouts. But let's muller
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  Speaker 1: coming in, be Man, what is going on here?
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  Speaker 2: Well, jaesieboit a wo Worth's group is Australia's largest retailer.
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  Speaker 2: It owns big brands like Big W pet Stock and
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  Speaker 2: of course Woolworth's supermarkets and the worst.
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  Speaker 1: Group employs more than one hundred and ninety thousand people
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  Speaker 1: across Australia and New Zealand and pulled in more than
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  Speaker 1: sixty nine billion dollars last year.
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  Speaker 2: In fact, just last quarter, Wooly supermarket sales increased five
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  Speaker 2: point nine percent. But now Woolies has warned that its
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  Speaker 2: earnings are expected they're too slow down.
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  Speaker 1: Yeah, Woolies warn the world's earnings will still grow around
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  Speaker 1: five to ten percent in this fiscal year. It'll probably
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  Speaker 1: closer to the low end of that range.
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  Speaker 2: Next minute, Wooly shares dropped six point six percent.
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  Speaker 1: And why the slow down in earnings? Be Man?
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  Speaker 2: Well, bread fruit vegetable suppliers are all pushing for higher
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  Speaker 2: prices due to the elephant in the room, the Middle
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  Speaker 2: East conflict.
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  Speaker 1: Yeah, but Willis has promised they're going to keep the
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  Speaker 1: price of their three hundred most popular food and grocery
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  Speaker 1: items steady for the next three months.
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  Speaker 2: We're talking eggs, bread, pasta, nappies.
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  Speaker 1: So even when supplies high costs, shoppers won't bear the brunt.
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  Speaker 2: Woolies will good for consumers, not great for Wooli's share price.
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  Speaker 1: Now, so what is the key learning here?
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  Speaker 2: Sometimes the strategy is not making more money right now,
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  Speaker 2: it's keeping your customers for longer.
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  Speaker 1: Yeah, Woolies has clearly made a decision to absorb cost
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  Speaker 1: pain today rather than pass it onto shoppers.
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  Speaker 2: That's a conscious strategic decision to buy shoppers loyalty and
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  Speaker 2: hope it pays off long term.
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  Speaker 1: And why would Willies do this?
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  Speaker 2: Well, firstly, they need the loyalty right now. Yeah.
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  Speaker 1: Over the past twelve months, Coals's market share and brand
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  Speaker 1: trust has overtaken Woolies.
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  Speaker 2: So freezing prices is an opportunity for Woolies to win
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  Speaker 2: back some loyalty and.
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  Speaker 1: Then man, after the last few years, Woolies could do
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  Speaker 1: with a bit of a positive story.
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  Speaker 2: Yeyep. There have been hble c allegations of Woolies price
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  Speaker 2: gouting with Coals. They also had empty shelves late last
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  Speaker 2: year after industrial action in their warehouses. So Woolies is
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  Speaker 2: taking a bit of a gamble.
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  Speaker 1: Yeah, absorb the pain now and hope customers stay loyal.
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  Speaker 2: And pray the Middle East conflict doesn't drag on long
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  Speaker 2: enough to make that bet very very expensive.
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  Speaker 1: For our second story, Bigger Group is churning out yogurt
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  Speaker 1: in record numbers, and it's predicting that its profits will skyrocket.
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  Speaker 1: Forty twenty thirty.
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  Speaker 2: One is having its best this moment since Vegimite. Tell
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  Speaker 2: me more, okay.
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  Speaker 1: So Beggar is the Aussie owned food and beverage company
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  Speaker 1: behind brands like Vegimite, your Daily Juices, your Bega peanut.
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  Speaker 2: Butter, pretty much everything you'd need for a very good wreki.
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  Speaker 1: Yeah, a bit of that ground. Bee Man biggest bean
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  Speaker 1: around for over a century and produced and sold the
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  Speaker 1: ingredients that millions of people use every single day.
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  Speaker 2: And in twenty twenty it bought Beer Giants, Lions dairy
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  Speaker 2: and drinks business for five hundred and sixty million dollars, and.
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  Speaker 1: That gave it ownership of brands like Dairy Farmers, Yo Play,
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  Speaker 1: Farmers Unionized Coffee.
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  Speaker 2: And now Farmers Union, and Dairy Farmer's Yogurts are giving
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  Speaker 2: Vegemite a run for its monet.
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  Speaker 1: Yeap Bega says yogurt sales are growing at eight and
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  Speaker 1: a half percent annually and it reckons the demand could
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  Speaker 1: drive profits by almost forty percent in the next five years.
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  Speaker 1: And why they jumping profits.
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  Speaker 2: Well, interestingly, it's largely down to social media trends and
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  Speaker 2: TikTok posts from people who are eating yogurt to get
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  Speaker 2: more of that sweet, sweet protein.
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  Speaker 1: You're kidding, So what is the key landing here?
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  Speaker 2: The winners are not always the ones who start trends,
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  Speaker 2: but the ones that are in the right place at
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  Speaker 2: the right time, end ready for them.
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  Speaker 1: Beg has ridden the TikTok effect to boost its sales
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  Speaker 1: over the past year.
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  Speaker 2: Obviously, that's when algorithmic content on social media drives rapid demand.
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  Speaker 1: And can often boost real world sales almost overnight.
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  Speaker 2: Think about our old friend Dubai Chocolate hitting twenty two
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  Speaker 2: million dollars in sales in just three months.
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  Speaker 1: Or matches global shortage after going viral.
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  Speaker 2: And at the start of this year, two Biscoff biscuits
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  Speaker 2: frozen in a tub of Greek yogurt went a nuts
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  Speaker 2: online and.
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  Speaker 1: Aussie suit markets literally ran out of yogurt.
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  Speaker 2: See joys White beg. It didn't make a better product,
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  Speaker 2: they just had the right product on the shelf at
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  Speaker 2: the right moment, and.
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  Speaker 1: Its acquisition of lie in Story Business means they now
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  Speaker 1: cover almost every corner of the dairy fridge.
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  Speaker 2: So when TikTok decides yogurt is the food of the moment,
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  Speaker 2: Figa has products ready and on the shelf.
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  Speaker 1: For our third and final story, Alphabet has smashed its
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  Speaker 1: first quarter expectations with a lazy one hundred and seven
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  Speaker 1: billion US dollars in revenue, and Google Search ain't dead yet.
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  Speaker 2: Just when the doubters were starting to get a little
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  Speaker 2: bit vocal, Google outperforms. So tell me more.
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  Speaker 1: Okay, So Alphabet is Google's parent company, and it's one
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  Speaker 1: of the largest tech firms in the world.
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  Speaker 2: We'd be talking over three hundred and fifty billion dollars
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  Speaker 2: in annual revenue across search, YouTube, cloud and ads and
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  Speaker 2: be man.
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  Speaker 1: For the past two years, there's been major fear from
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  Speaker 1: investors the Google Search could become irrelevant as more people
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  Speaker 1: search for things on TikTok and chat chpt.
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  Speaker 2: But judge boy, Alphabet's first quarter numbers just torched that
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  Speaker 2: narrative lit it up.
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  Speaker 1: Yeah, get this. Alphabet's total revenue for the quarter hit
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  Speaker 1: one hundred and seven billion US dollars, which is up
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  Speaker 1: nineteen percent.
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  Speaker 2: That's more than the annual revenue of Combank and ZED,
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  Speaker 2: Westpac Now and Macquarie combined.
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  Speaker 1: Wow.
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  Speaker 2: And what part of the business were the big winners? Well,
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  Speaker 2: Google Cloud was the real rocket ship here. It's revenue
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  Speaker 2: jumped forty eight percent, over seventeen point six billion US dollars.
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  Speaker 1: And growing faster than awus and Azure as well.
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  Speaker 2: But don't sleep on Google Search either. Its revenue grew
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  Speaker 2: to over sixty bill US dollars.
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  Speaker 1: So be man. Despite the fears of AI technology killing
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  Speaker 1: Google Search, it appears to be writing the way.
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  Speaker 2: So what's the key learning here?
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  Speaker 1: Every new technology is supposed to prompt the demise of
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  Speaker 1: the last one, but sometimes it just makes the last
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  Speaker 1: one a little bit stronger.
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  Speaker 2: For the last two years, the narrative was that AI
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  Speaker 2: would number lies Google Search.
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  Speaker 1: You know, why would you google something if chat chapt
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  Speaker 1: just tells you the answer?
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  Speaker 2: Does what their data suggests? The opposite is happening because
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  Speaker 2: search queries are actually at an all time high and
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  Speaker 2: search revenue increase nineteen percent, and.
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  Speaker 1: The reason is because Google's own AI products are inside search.
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  Speaker 2: Now we're talking AI overviews and Gemini integrations, which means
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  Speaker 2: every AI query becomes a new search query, and.
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  Speaker 1: Every search query becomes another opportunity for Google to monetize
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  Speaker 1: their customers.
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  Speaker 2: So does it woit? Google isn't fighting AI anymore, It's
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  Speaker 2: transforming its existing business into an AI first version of itself,
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  Speaker 2: and based on.
• 6:32
  Speaker 1: These quarterly results kind of seems like it's workings. Next week,
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  Speaker 1: the RBA could make the third cash rate hike or
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  Speaker 1: twenty twenty six, and that would be big news for
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  Speaker 1: millions and millions of or controllers across Australia. If you
• 6:42
  Speaker 1: want to stay across the latest updates on the RBA
• 6:45
  Speaker 1: cash rate, we'll have it here, first on the Flux
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  Speaker 1: Flux app and check it all out.
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  Speaker 2: Thanks for listening and we'll see you on Monday