Sigma Healthcare reported underlying EBIT growth of 20% in 1H25, while Chemist Warehouse reported standalone 2H24 EBIT growth of 37%. Chemist Warehouse EBIT for the comparable trading period is 14x larger than Sigma. This cements our view that the merger is the key driver of Sigma’s share price.

Lovisa reported FY24 EBIT of $128 million, up 21%. Sales of $697 million, up 17.3% were a 2% miss to Visible Alpha consensus. The comparable sales trading update at 2.0%, while an improvement on 2H24 was lower than consensus expectation. Sales on a per store basis in A$ were lower across all segments. The gross margin performance was a highlight, delivering 81.2% in 2H24 and 80.9% for the full year, up 108bp. Elevated costs, especially wages and rents, suggest there is little operating leverage being realised so far.

Domino’s has delivered a post-market trading update highlighting very weak sales in Asia and slowing sales in Europe for 1H24e. The tone of the update also suggests progress, but not enough, on franchisee profitability. We expect it will take longer for store rollout to improve and as a result remain negative on valuation grounds.

Costa Group reported a weak FY22 result with sales up 11%, but EBITDA down 2%. The quality of its citrus crop dragged down pricing and profit margins significantly. Elsewhere, berries and mushrooms showed good pricing growth, while tomato prices were down. The company had high cost growth in FY22 and there will be additional freight and wage cost headwinds.

Domino’s share price has fallen a long way in 12 months. In just the past two months, the stock is down 29%. The main concern is European earnings. We agree and consensus may be 5%-10% too high for FY23e. Within the next six months, the company has enough flexibility to manage its costs and may start to see some cost recovery through pricing.