Flight Centre, Brambles send tariff warning to stock market bulls

Trading updates from Flight Centre (ASX: FLT) and Brambles (ASX: BXB) on Monday confirmed investors' fears that President Donald Trump's tariff rollercoaster will translate into profit downgrades and tumbling confidence over the rest of 2025.

Travel group Flight Centre is a bellwether for the health of corporate and leisure spending in Australia and the US, with corporate travel budgets and holiday plans the first to be cut back when the market senses a downturn ahead.

On Monday the travel group cut profit before tax guidance by around 18% and warned of poor April sales, although traders shrugged off the news to bid the stock higher as the update was better than feared.  

Elsewhere, pallets giant Brambles blamed flagging goods demand for trimming sales growth guidance in financial 2025. In response the stock fell 5% to wipe around $1.4 billion off its value on Monday.

Share investors look on the bright side

Since Trump's 90-day tariff pause announced on 9 April, Australia's benchmark S&P/ASX 200 has jumped 8.8% from from 7,375 points to 8,031 points, with Wall Street's S&P 500 Index surging 11.6%.

The share market rebound contrasts to the warnings coming out of company management teams that the US may face empty shopping shelves and higher prices for consumers within months. 

While the price action in gold, bonds, options, oil and foreign exchange markets also contrasts to robust stock valuations to signal the bottom may not be in for shares as yet. 

Share buyers are perhaps counting on central banks easing cash rates later this year with Citi predicting the US Federal Reserve will cut rates 125 basis points and local interest rate traders expecting the Reserve Bank to cut rates three times. 

Still, the chorus of companies warning on the tariffs' impact is likely to grow and may reach a tipping point where rate cuts won't be enough to offset profit downgrades. In that case it could be - look out below - for stock investors. 

Other retailers, Yowie, Bubs, flag risks to US economy

Thanks to data provider AlphaSense Market Intelligence, I've put together a wrap of what other ASX management teams have said about tariffs to help investors get a read on what might be ahead. 

Micro-cap chocolatier Yowie Group (ASX: YOW) said it imports chocolate and toys to the US from Canada and China respectively, with the latest tariffs adding US$6.1 million to its potential annual cost base. 

The stock has been suspended since February 27 and it's a practical example of the tariffs' impact on prices and potential to leave shelves empty in the US. 

As another example back in May 2022 the US had an infant-formula shortage when President Biden signed an executive order to get Aussie producer Bubs Australia (ASX: BUB) to ship emergency supplies to the country. 

This was partly after US manufacturer Abbot closed a facility in Michigan in a nod to the declining industrial production in the country Trump seeks to reverse. 

In February 2025 Bubs' chief executive Reg Weine told analysts on its earnings call that tariffs are a concern for US families. 

"If a 10% tax was applied to Bubs, I think we've got the pricing power in the marketplace to absorb that," Weine told analysts. 

"If it was a 25% tariff, then obviously that would have a dampening effect on volume and demand. But it is something that we are planning for and we do have some contingency and mitigation plans in place."

AlphaSense also highlights how $3.2 billion plumbing supplies business Reliance Worldwide (ASX: RWC) faces tariff problems. The stock is down 20% in 2025 as it revealed about $120 million of goods sold are purchased from China. 

Reliance's management said it has options to offset the impact and profits in 2025 are unlikely to be affected due to inventory lags. However, it's another business vulnerable to an extended trade war. 

If you're an ASX-focused investor it's also worth remembering China is by far Australia's largest trading partner and the spill over from a slowdown in its tariff-hit economy is certain to affect the local economy. 

Therefore it might be time to brace for a slew of sales or profit downgrades in the months ahead.