The Flight Centre Travel Group Ltd (ASX: FLT) share price is lifting off today.
Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed yesterday trading for $20.871. In early morning trade on Thursday, shares are swapping hands for $21.70, up 4.3%.
This comes after the global travel agency upgraded its 2023 financial year (FY23) guidance.
What’s the new earnings outlook?
ASX 200 investors are bidding up the Flight Centre share price after the company boosted its underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) forecast for the 12 months to June 30.
The new guidance is for underlying EBITDA between $295 million and $305 million.
That’s up from the prior underlying EBITDA guidance of between $270 million and $290 million. The company noted this represents a major $483 million improvement from the underlying $183 million loss posted in FY22.
Also potentially offering a boost to the Flight Centre share price today is the expectation of some $22 billion in total transaction value (TTV) for FY23. That’s up almost 115% year on year. And it represents the second-best full-year result, beaten only by FY19’s $23.7 billion in TTV.
However, FY23 is poised to set a new record for global corporate TTV, which is forecast to come in at $11 billion. That’s more than 20% above the prior record of $8.9 billion set in FY19.
Global leisure TTV is forecast to come in at around $10 billion.
Commenting on the forecast results sending the Flight Centre share price higher today, managing director Graham Turner said he was pleased with the company’s “continued recovery as demand has generally rebounded solidly across both our leisure and corporate travel businesses”.
Turner noted that Flight Centre delivered record TTV “while investing significantly for the future by securing large volumes of new accounts, expanding our sales force and introducing innovative new platforms and products for our customers, which should lead to stronger returns in the years ahead”.
Commenting on that outlook Turned added:
Our expectations are that leisure travellers will continue to prioritise holidays and experiences over other areas of discretionary spending, as we have seen in the past and as evidenced by the consistent year-on-year growth in outbound travel in large and important markets like Australia.
In corporate, we expect that the large volume of new business that we continue to win – both from competitors and accounts that were previously unmanaged – will offset the impact on TTV flowing from lower-than-normal client spend.
Flight Centre share price snapshot
The Flight Centre share price has been a strong performer in 2023, up 51% year to date.
