Why did the Flight Centre share price take a flogging in November?

The Flight Centre Travel Group Ltd (ASX: FLT) share price underperformed the S&P/ASX 200 Index (ASX: XJO) by around 10% over the course of November.

After closing October at $16.65, stock in the travel agent crumbled to finish November trading for $16.06. That leaves the Flight Centre share price having fallen 3.54% over the 30-day window.

For comparison, the ASX 200 rose 6.13% to end November at a then-six-month high of 7,284.2 points. Meanwhile, the company’s home sector, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ), gained 1.33% last month.

So, what went wrong for the Flight Centre share price in November? Let’s take a look.

What weighed on the Flight Centre share price last month?

There was only one day of price-sensitive news weighing on the ASX travel share last month.

That came on the back of the company’s annual general meeting (AGM), where management provided a trading update for the first four months of financial year 2023.

Its total transaction value lifted 246% on that of the corresponding period to $6.8 billion, while its revenue rose 248% to $667 million. Its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) also increased to $61 million, while its underlying pre-tax profit was in the green.

However, the company’s revenue margin remained at 9.8% amid reduced front-end commission payments from certain airlines, my Fool colleague James reports.

The travel agent expects its first-half underlying EBITDA to come in at $70 million to $90 million.

Sadly, the market bid the Flight Centre share price 3.76% lower on the back of its AGM and trading update.

Following the release, Goldman Sachs tipped the company’s profits to recovery strongly later this financial year and next. The broker said Flight Centre’s revenue margin “remains a key concern”.

Right now, the stock is 14% lower than it was at the start of 2022. It has also fallen 8% since this time last year.

For comparison, the ASX 200 has fallen 4% this year and has gained 1% since this time last year.

The post Why did the Flight Centre share price take a flogging in November? 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. 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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