Brambles maintains guidance despite US repair costs

• Brambles reaffirmed its full-year guidance for sales and profit growth despite higher pallet repair costs in the United States.
• The company share price reacted to the announcement of ongoing earnings growth and strong free cash flow generation.
• Management cited increased repair capacity and subcontractor turnover as key operational factors driving current US repair expenses.

Brambles (ASX:BXB) reaffirmed its full-year guidance for sales revenue growth of 2% to 4% and underlying profit growth of 2% to 6% despite incurring extra expenses to fix pallet repair problems in the United States.

Logistics group Brambles operates a pool of about 350 million pallets and containers globally under the CHEP brand.

CEO Graham Chipchase stated that the group was on track to produce sales revenue growth of between 2% and 4% for the 12 months ended June 30, 2027, and underlying profit growth of between 2% and 6% on a constant currency basis.

“Looking ahead to FY27, we expect to continue delivering earnings growth and strong free cash flow generation after including the additional costs and investment we are making to resolve the repair capacity constraints in our US business,” said Brambles CEO Graham Chipchase.

The company stated that US pallet repair capacity had increased by 3% compared with April, though subcontractor turnover at certain sites created operational inefficiencies despite the addition of 40 extra repair benches.

Following the announcement, the Brambles' share price was up at $20.58.

The logistics provider continues to manage its extensive global network of transport equipment while addressing regional operational bottlenecks.