AGL and IAG’s profit upgrades help explain both the pain that retailers such as Domino’s is under, and the pressure the Reserve Bank of Australia now faces.
Reserve Bank of Australia governor Philip Lowe need only reflect on the profit guidance ASX companies gave investors this week to understand the ongoing inflationary pressures he is battling. marked its impressive return from the corporate wilderness last year. But it’s important to note its improved earnings outlook and energy transition investment plan are powered by electricity price increases of up to 50 per cent.
The combination of higher electricity expenses, higher insurance premiums and the hot jobs market was confirmed with s. Then fresh numbers from Retail Food Group on Thursday further emphasised the narrative we’ve seen from fellow downgraders Baby Bunting, Adairs and Universal Store in recent weeks – that is, the consumers’ discretionary dollar has dried up.
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