Why did the Flight Centre share price beat the ASX 200 in August?

The Flight Centre Travel Group Ltd (ASX: FLT) share price outperformed the broader market in August, gaining 3.95% over the course of the month.

After closing July trading at $17.22, the stock lifted to finish Wednesday’s session at $17.90.

For comparison, the S&P/ASX 200 Index (ASX: XJO) lifted just 0.6%. At the same time, the company’s home sector – the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) – slumped 0.2%.

So, what sent the travel giant’s share price soaring above the ASX 200 last month? Let’s take a look.

What drove the Flight Centre share price in August?

The Flight Centre share price stretched its wings in the August earnings season. It lifted to fly higher than the broader market despite dipping 4.5% on the back of the travel giant’s full-year results.

It posted $1 billion of revenue for financial year 2022 – a 154% increase on that of financial year 2021. But that wasn’t enough to boost its bottom line into the green.

Flight Centre recorded a $272.6 million after-tax loss for the period while its earnings before interest, tax, depreciation, and amortisation (EBITDA) came to a $200 million loss.

On a more positive note, the company’s global corporate business ended the year with a $13.5 million profit. Its leisure business also returned to profit in the final quarter.

And it may have been more than the company’s earnings driving its stock higher in August.

The Flight Centre share price lifted 7% over the final two sessions of last month amid rumours the company could be getting ready to make some major merger and acquisition moves.

The company responded to speculation of its potential acquisition of US travel company Altour International on Tuesday. It neither confirmed nor denied the rumours, saying:

While it is company policy to not respond to media speculation, the company has had, and continues to have, various discussions with a number of parties regarding strategic opportunities.

As of the final close of August, the Flight Centre share price was 3.8% lower than it was at the start of 2022. For comparison, the ASX 200 recorded a 7.9% tumble over the same period.

The post Why did the Flight Centre share price beat the ASX 200 in August? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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