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Fears soaring fuel costs would wound demand for petrol-hungry SUVs have failed to materialise, the boss of auto classified website Carsales.com said as the company reported a quadrupling of full-year profit.

Carsales chief executive Cameron McIntyre said the company has maintained momentum in the first six weeks of this financial year, defying a crunch in household budgets from the RBA’s most aggressive series of interest rates in 30 years.

He said search traffic and sales remain at levels similar to 12 months ago, despite JB Hi-Fi calling out “heightened uncertainty” and Myer and Nick Scali reporting discretionary spending beginning to slow.

“In Australia we do 20 million-plus (search) sessions a month. Across the world we would do 100 million sessions a month. What’s interesting is the searches versus last year are pretty similar in terms of what people are looking at,” Mr McIntyre said.

“I was expecting to see as things got tougher that people would search for more hatches and less SUVs on two bases, hatches tend to be cheaper and also you’ve got high cost of living around fuel so a hatch would be a cheaper car to run.

“But what we have seen in the last 12 months is there has been a move towards SUVs, searching less for sedans while hatches have been around the same, which was a surprise.”

More surprising is the pandemic-fuelled surge in used car prices has failed to dissipate, despite more vehicles hitting the market. Mr McIntryre said prices remain 40 per cent higher on 2019 levels, heralding a new normal.

“Over the last sort of several months we’ve seen prices come down marginally, but they’ve stabilised. They’re still around that 40 per cent mark above where they were pre-Covid. I honestly don’t see them tracking down materially anytime soon.

“What it says to me is where interest rates have gone up over the last sort of 12 to 18 months … on a $30,000 car loan doesn’t really move the needle. The other thing is from additional research that we’re doing is consumers have pretty much banked where car prices are today.”

Carsales, which took over US-based Trader Interactive and a controlling stake in Brazil’s Webmotors during the year, reported a 301 per cent leap in net profit to $645.6m. Meanwhile, revenue surged 53 per cent to $781.2m.

As a result, the company has hiked its final dividend, which it will pay on October 16, by 33 per cent to 32.5 cents a share. Carsales’ shares soared 7 per cent to $26.33, valuing the company at almost $10bn, on Monday.

Part of Carsales financial success lies in its acquisition spree across the Americas. Its North American operations reported a 22 per cent surge in revenue to $239.4m, while earnings before interest, tax, depreciation and amortisation vaulted 17 per cent to $140m.

In Latin America, revenue leapt 40 per cent to $138.9m, while EBITDA surged 50 per cent to $47.7m.

More than half of Carsales’ earnings are now generated outside Australia, and Mr McIntyre is expecting “good growth” in the year ahead, highlighting economic trends in the US that are about six months ahead of Australia.

“The consumer in the US has come up a little bit. What happened during Covid was everyone moved into these lifestyle and leisure assets because they couldn’t travel anywhere. That’s come off a bit but comparing that to 2019, which is pre-Covid, things have continued to grow in that business.

“As (US) market conditions improve and interest rates come down, I think what you’ll see is people should eventually start venturing back into those lifestyle assets that they might have been holding off on while interest rates were reasonably high. So that bodes well for us if we’re six months behind them in that cycle.”

Barrenjoey head of media and telco research Eric Choi said Carsales’ actual earnings before interest, tax, depreciation and amortisation of $425m were in-line with consensus estimates of $428m.

“FY24 guidance: for ‘good’ EBITDA growth on a PF (pro-forma) FY23 EBITDA base of about $496m, we think good can mean 10-14 per cent, which would imply FY24 EBITDA of ~$546-565m,” Mr Choi wrote in a note to investors.

“However guidance excludes potential FX (foreign exchange) tailwinds, which could be another slight kicker in FY24.”

E&P analyst Entcho Raykovski said the FY24 outlook for “good” growth in pro-forma EBITDA is “broadly consistent with consensus estimates of an 11 per cent gain.

“In our view, this result and outlook commentary will be enough for the stock to hold on to its recent gains.”

Citi’s Siraj Ahmed said: “We see minor upside risks to consensus on FY24e EBITDA to reflect guidance, however there could be minor downside risks to NPAT given consensus is forecasting ~20 per cent yoy growth vs. company guidance of 15 per cent growth”.

Australia’s retail sector could unlock billions of dollars in value by 2030 through accelerated use of generative artificial intelligence (GAI), a new report finds.

Titled Australia’s Generative AI Opportunity, the report is a collaboration between the Tech Council of Australia and Microsoft.

It shows that GAI could contribute between $45 billion and $115 billion a year to Australia’s economy by 2030 through the improvement of existing industries and enabling the creation of new products and services.

Retail has been identified as one of four key sectors of the Australian economy to benefit from GAI, with the sector estimated to reap between $3 billion and $9 billion annually by 2030.

The key drivers of value for GAI in the retail sector are better customer support and personalised experiences, the report found, as well as streamlined backend operations. For example, the report claims GAI can automate 30 per cent and augment 32 per cent of the tasks performed by a shop sales assistant.

GAI can also improve the productivity of customer support workers by 14 per cent, as well as drive greater customer engagement and personalisation of products.

“Having invested heavily in omnichannel capabilities during the COVID pandemic, Australia’s retail industry is now primed to integrate generative AI into existing digital platforms,” Tech Council CEO Kate Pounder said. “This stands to benefit companies striving to innovate and stand out, and customers wanting better service and prices.”

Microsoft Australia chief technology officer Lee Hickin said GAI has become a transformative technology in 2023, with adoption growing across various sectors.

“These include several pilot programs being explored by our retail customers, as they look to automate processes, create personalised offerings and streamline operations.”

The other three key sectors identified in the report are healthcare, manufacturing, and professional and financial services. The report details potential use cases for GAI in each of these sectors and the subsequent economic value that could be generated using the technology.

The report added that industry and government are at a critical juncture in GAI adoption, with deeper collaboration needed for Australia to capture the economic benefits.

Tech Council and Microsoft said leveraging Australia’s comparative advantages in digital technology is key to spurring this collaboration. They include a large and highly skilled tech workforce, strong investment in digital infrastructure and a high level of cloud computing adoption.

The report also identified that technology capability, enterprise readiness, awareness and skills, and responsible AI are key barriers that industry and government face in capitalising on GAI.

The report was based on comprehensive economic analysis as well as consultations with industry, government and academia.

Australian fashion spending surpassed other retail categories to grow 17.4% during the 'Click Frenzy' sales period, according to the latest research. 

Australia Post's latest quarterly Inside Australian Online Shopping Report showed online spend in May grew 9.7% month-on-month (MoM) and 0.6% year-on-year (YoY), with basket sizes for fashion hitting $151 on average.

This was despite an overall drop in average basket size in 2023 by 6% YoY to just $105.

During the end-of-financial-year (EOFY) sales event, fashion hit second place in overall popularity at 10.2%, behind home and garden at 12.4%. Overall, EOFY sales were up 4.3% on last year.

In the fourth quarter of FY23 online purchases in fashion were down 3% on the YoY, but up 9.5% QoQ, with an overall market share of 26%. Fashion is the second-highest category in market share behind variety stores at 36%, with that category up 18% YoY in Q4 FY23, and up 13% QoQ.

Despite the gains in fashion, the report found there is an overall softening overall in online purchases, with 9.4 million households (or 82% of the Australian population) making an online purchase during the 2023 financial year.

An average 5.5 million households made an online purchase each month in Q4 FY23 - an increase of 3.9% compared to the equivalent quarter last year. However, online spend is down 3.1% compared to last year.

With consumer buying confidence at low levels, Australia Post claimed consumers across the country, particularly younger generations, are becoming ‘strategic shoppers’ — looking for ways to maximise the value of their dollar and increasingly take advantage of key sales events.

Australia Post executive general manager of parcel, post and eCommerce services Gary Starr said that while an increasing number of households made an online purchase in the fourth quarter (compared to the last year), it’s clear that cost-of-living pressures are taking effect.

“Aussies are now more cautious and selective with where and when they spend their money, which is why online shopping carts are averaging smaller than last year,” Starr said. “Our love affair with online shopping hasn’t waned, however cost-of-living pressures are creating short-term headwinds.

“This is an opportunity for retailers to entice customers via sales events, subscriptions or other forms of rewards that create loyalty and repeat purchases.”

An Australia Post consumer survey conducted this year revealed that 85% of Australians aged 18-34 plan to shop (or have shopped) during dedicated sales events.

Meanwhile, customer loyalty programs and bundling services are proving popular with online shoppers, with 1 in 4 consumers turning to online retail subscriptions as part of their cost-saving practices.

Regional Australia saw a year-on-year (YoY) growth of 4.2% in the last quarter, compared to just 0.7% YoY in metro areas. The Northern Territory led in this last quarter, with an increase of 9.3 % YoY in online sales compared to last year.

Global toy company Mattel has partnered with Retail Prodigy Group (RPG) to launch an online store in time for the Barbie movie launch.

Mattel’s portfolio includes Barbie, Hot Wheels, Thomas & Friends, Fisher-Price, American Girl, Uno, Masters of the Universe, Monster High and Mega.

RPG is an Australian retail franchise partner for global brands and since 2011 has worked with Nike to expand its footprint across Australia and New Zealand.

Paul Faulkner, MD of Mattel – Asia Pacific, said the brand is on a mission to create “innovative products and experiences” together with RPG.

“Our consumers are fans, looking to enjoy our brands in categories like apparel and homewares. Our new partnership with RPG lets us do just that.”

Stephen Younane, CEO of RPG, said the company is “dedicated to providing the best retail experiences” for its customers and is looking forward to bringing that same excellence to Mattel’s brand portfolio.

Samsung has unveiled its fifth generation of folding phones at an “Unpacked” event in Seoul — hitting back at competitors that have brought several new flexible devices to market in the past year — while also introducing new watches and tablets.

The Korean company’s retro-inspired Galaxy Z Flip line has become the most popular format for folding smartphones, with other brands including Oppo and Motorola introducing their own takes with bigger displays and less visible creases in the time since the 2022 Z Flip4 was released. This year’s Z Flip5 is therefore a big deal for Samsung.

The new phone has a much larger OLED screen on the outside shell (almost four times larger, at 3.4-inches), which can act as a lock screen and show notifications, or display various widgets and be used to compose or reply to messages. Samsung also showed off the camera viewfinder capabilities of the larger screen; particularly the ability for subjects to see what’s being recorded.

Once opened up the phone has the same tall 6.7-inch OLED and fast 120Hz refresh as last year. But Samsung said the entire phone is more durable thanks to a new generation of Gorilla Glass, a new metal frame and a redesigned hinge which also now lets the device fold flush with no gap. It has the same dual rear cameras and single selfie cam as the Fold4, but is powered by Qualcomm’s new Snapdragon 8 Gen 2 processor.

The larger Fold5 hasn’t changed as much since last year’s device, though also gets the redesigned hinge, frame and newer processor to stave off competition from Google’s Pixel Fold (which is not available in Australia). The Fold5 is very slightly thinner and around 10 grams lighter compared to last year’s device. As with the Fold4, it has a skinny 6.2-inch OLED on the outside and a square 7.6-inch OLED when opened up, both with adaptive 120Hz refresh. It also has a total of four cameras which are very similar to last year’s; a 3x zoom, wide and ultra-wide on the back, one on the cover and one under the large display.

Samsung focused on the multitasking capabilities of the Fold5, showing a PC-like taskbar to switch between recent apps or arrange multiple windows on the screen, as well as the ability to cut and paste between apps by holding with one finger and dragging with another. The phone also works with a redesigned S Stylus, though it’s sold separately and is not stored in the phone. Samsung will sell cases with stylus storage.

Both phones are now up for pre-order and will be available on August 18. In Australia they’ve each had a slight price increase relative to last year’s devices. The Flip5 will start at $1650, and the Fold5 at $2600.

Samsung Australia’s vice president of mobile, Garry McGregor, said the company’s folding phones have redefined people’s expectations of smartphones.

“Foldables, and by extension our Galaxy Z Series, are no longer a novelty. Adoption of Foldables continues to grow at pace both in Australia and around the world,” he said.

“We can’t wait to get these devices in the hands of Australians for an intuitive, connected experience that inspires them to be creative and express themselves.”

Also at Samsung’s event, the company unveiled a new line of Galaxy Watch6 devices and a series of premium tablets called Tab S9. The former has a focus on personalised health guidance and will start at $550. The latter comes with an 11-, 12.5- or 14.6-inch OLED and the Snapdragon 8 Gen 2, as well as a stylus, starting at $1300.

McGregor said the demand for tablets overall had slowed, but that there was an opportunity at the high end for productivity and creativity devices.

In good news for Samsung fans, a “classic” version of the Galaxy Watch6 brings back the rotating bezel, which was previously removed from the devices.

Global Fashion Group (GFG) has recorded lower-than-anticipated sales across its three international markets in the second quarter of 2023.

GFG operates Dafiti in Latin America, Zalora in Southeast Asia and The Iconic across Australia and New Zealand. 

GFG has reported that net merchandise value (NMV) declined in all regions during the period - approximately 19% in Latin America, 17% in South East Asia and 9% in Australia and New Zealand.

Based on preliminary results, GFG expects Q2 2023 approximate figures of negative 15% NMV growth and negative 19% revenue growth, both on a constant currency basis.

Alongside these, it is predicting a negative drop in adjusted earnings before interest, tax, depreciation and amortisation (A’EBITDA) margin of 7% and €467 million pro-forma cash.

The company’s previous outlook for the full year 2023 expected a continuation of the lower demand trends seen in Q4 2022 into H1 2023, and the potential for a recovery from this in H2 2023.

However due to the weaker sales and volumes, GFG reported the opportunity to perform more strongly in the second half of 2023 no longer appears probable.

“As a result, GFG now expects its financial performance for full-year 2023 to be impacted by greater discounting in our markets, clearing of higher-than-planned levels of aged inventory and ongoing fixed cost deleverage from lower volumes despite cost actions,” the company noted in a profit update.

GFG now expects full-year 2023 to see a negative NMV growth of 15% to 10% on a constant currency basis, with around €1.3-1.4 billion in NMV, circa €0.9 billion of revenue, a negative adjusted EBITDA margin of 8% to 6% and Capex investment of c.€30 million.

All figures reported herein are preliminary and unaudited. GFG will publish its second-quarter results as scheduled on August 10, 2023.

Pureplay books retailer Booktopia has raised $8.1 million in capital raising to fund the completion of its Next Gen customer fulfilment centre and enhance its capital position.

The raise comprises a $6.5 million two-tranche placement – which is subject to the board’s discretion – and a $1.6 million debt-to-equity conversion, subject to shareholder approval. The loan facility ($5 million) was secured from AFSG Asset Management.

Booktopia chairman Peter George said: “After two years of losses, completing the Next Gen CFC and with the other business improvement initiatives already announced will reset the cost base of the business.

“The raise will enable BKG to complete the Next Gen CFC by late August this year. With the benefits of these initiatives, we expect a return to EBITDA growth from the next financial year.”

In a trading update, the retailer said “challenging” trading conditions were observed throughout the second half of the financial year compounded by increased labour costs and other disruptions associated with the transition to the CFC.

“Looking ahead to FY24, with the annualising benefits of the initiatives previously announced, and the realisation of the operating efficiencies and increased capacities of the Next Gen CFC, BKG forecasts an underlying EBITDA profit of $13.5 million,” the business said in a statement.

For this financial year, the business expects an unaudited underlying loss of about $5 million.

Meanwhile, the company has advised that the short-term consultancy agreement between BKG and Tachyon Ventures, an entity associated with founder and former CEO Tony Nash, will end on August 31.

Nash will reman a non-executive director of Booktopia.

US giant Amazon is projected to reach $5.5 billion in Australian turnover next financial year, and will keep thriving as more shoppers seek better value for money, says broker Jarden.

Ben Gilbert, who heads the Jarden research team, said a perfect storm was brewing for Amazon to gain more share of consumers’ wallets propelled by a weaker macroeconomic backdrop and more customers doing price comparisons.

“Amazon is maintaining momentum in a slowing market, taking greater than 10 per cent of incremental sales excluding food. Amazon thrives as consumers seek out value, they research more, with Amazon’s range and pricing putting it as a first point of call,” he said.

Mr Gilbert said the sectors most at risk remain office, electronics, fashion, house and garden, and recreation. In Australia, Amazon’s penetration and Prime membership take-up was high, suggesting scope for material growth ahead, he added.

The e-commerce giant has more than doubled its operational footprint in the past year after the launch of its first robotic fulfilment centre at Kemps Creek in western Sydney. Australia has been one of Amazon’s most successful new market entries, according to Mr Gilbert. Its direct impact has been less visible owing to a retail boom, COVID-19 and overhyped expectations when the marketplace first launched in 2017.

Amazon Australia had a strong 2022, with reported revenue rising 50 per cent year-on-year to surpass $2.6 billion. Jarden estimates it generated about $4 billion of gross merchandise value, which includes sales from third-party merchants.

Over the next 24 months, as Amazon adds more postcodes to its same-day delivery service in Melbourne and Sydney, it will continue to expand its addressable market. But it needs to add more major brands to keep shoppers coming back.

Amazon Australia offers about 200 million items, but overseas that figure is about 300 million.

Mr Gilbert said if Amazon achieved this, it would heap more pressure on discretionary retailers such as Adairs, shoe seller Accent Group, marketplace Kogan, youth retailer Universal Store, Peter Alexander-owner Premier Investments, JB Hi-Fi and Harvey Norman.

While many retailers are mulling staff cuts, Amazon Australia flagged plans to hire more than 1000 seasonal workers preparing for the mid-year sales season.

Loyalty and last mile capabilities are another battleground for Amazon. Mr Gilbert thinks brands with the most active customers – those that have purchased in the past 12 months – will have more ability to withstand competition.

“Customers find the most beneficial programs are those that accumulate points to save for a big reward or redeem small rewards more quickly, more than special recognition or special access to new product,” he said.

Mr Gilbert said the 5.75 per cent increase to minimum wages from July 1 flagged by the Fair Work Commission last week created a material headwind for retailers, which were already battling rising utilities, rents and outbound freight. A weaker Australian dollar would also create challenges for vertically integrated players next year as hedging rolls off.

Apple has announced its first extended reality headset, alongside a stack of new computers and a first look at its latest iPhone software, at its annual developer conference in California.

The highly anticipated Vision Pro, which Apple refers to as a “spatial computer” rather than using any of the terminology established by other headset makers, is the tech giant’s first major new product category since the Apple Watch almost a decade ago.

It uses a dial above the user’s ear to adjust the mix of real world and computer imagery in their view, and also has a screen on the outside to display the user’s eyes to other people, although this changes to a colourful pattern if the user is fully immersed.

The headset is controlled by a user’s movement, eyes, hands and voice, with no controllers required. It connects to a pocketable battery pack via a cable, letting it run for up to two hours, Apple said. It can also be connected to a power source for longer use.

“Today marks the beginning of a new era for computing,” said Apple chief executive Tim Cook.

“Just as the Mac introduced us to personal computing, and [the] iPhone introduced us to mobile computing, Apple Vision Pro introduces us to spatial computing.

Built upon decades of Apple innovation, Vision Pro is years ahead and unlike anything created before.”

Apple showed off several of its own apps in spatial mode, including Photos, FaceTime and Safari, as well as third-party apps that will be available from the App Store.

Australian app JigSpace, which is enterprise software that allows the creation of 3D presentations in augmented reality, was featured at the event.

Users will also be able to capture and replay immersive video using the headset, or connect to a Mac computer to use virtual displays. The device works with Bluetooth accessories such as keyboards and controllers.

For flat content, such as Disney+ or Apple Arcade games, Apple showed off a mode using a virtual screen up to 30 metres in size. The company has also partnered with ZEISS to create magnetic optical inserts for users who wear glasses.

In the US, the headset will be available in early 2024 and will cost $US3500 ($5290), with Apple saying it will arrive in other countries later in 2024. Specific launch details for Australia have not been announced.

Apple’s entrance into this market could represent a tipping point for headsets, which have been moderately successful as gaming devices but haven’t caught on more broadly. Meta’s popular Quest 2 is set to be succeeded by the $830 Quest 3 later this year, but its enterprise-ready Quest Pro has had a mixed reception. Meanwhile, VR stalwart HTC has proactively introduced an extended reality headset to compete with Apple’s with the $2100 Vive XR Elite.

Alongside the Vision Pro, Apple also announced three new computers.

A 15-inch MacBook Air, which Apple says is the thinnest laptop of its size, is powered by the M2 processor and features an all-new six-speaker audio system. It will release later this month at $2200, while the 13-inch MacBook Air with M2 has had a price drop to $1800.

A refreshed version of the professional-grade Mac Studio includes the option of a new chip, the M2 Ultra, which is also featured in a revitalised Mac Pro desktop computer. The introduction of Apple Silicon to the Pro line eliminates the last traces of Intel chips from Apple’s lineup. The new Mac Studio starts at $3300, while the M2 Ultra Mac Pro starts at $12,000.

In software, Apple announced new features coming to its iPhone via iOS 17 later this year.

Users will be able to create “contact posters” to customise how they appear to others when making a phone call, while “NameDrop” is a new way to exchange contact details by touching two iPhones together.

There will also be a wellbeing-focused journaling app included with iOS 17, and a new mode that turns the iPhone into a smart display when it’s charging and set at a horizontal orientation.

Interactive widgets also featured prominently in Apple’s presentation, showing up on the iPad’s home and lock screens in iPadOS 17, on computers as part of MacOS Sonoma, as well as on wrists as part of a totally overhauled Apple Watch navigation system in WatchOS 10.

From any watch face, users can turn the digital crown to scroll through widgets that are chosen based on context, such as the time of day.

Apple also made an unusual effort to position Mac as a platform for video games, with legendary designer Hideo Kojima appearing to promote a Mac version of his game Death Stranding, and promise additional games of his would arrive on the platform in the future.

MacOS Sonoma will introduce a game mode that optimises performance and reduces latency for certain Bluetooth accessories, while Apple has also created a toolkit that allows creators to more easily port games to work on M1 and M2 chips, which it says will save months of work.

Australian e-commerce marketplace, Redbubble and its subsidiaries have implemented cost-reduction measures to achieve positive cash flow. The company plans to axe almost a quarter (23 per cent) of its staff as it seeks to reduce overheads by $13 million to $15 million.

Although the decision was difficult, Redbubble CEO and MD, Martin Hosking, said they believed it was necessary for the company’s financial recovery. 

“Since being appointed CEO, my primary focus has been returning the group to profitability as soon as possible,” he explained. 

“It has become clear that to achieve this; we need to reduce our cost base further. As a result, we have made the difficult decision to remove a number of roles from the group.”

Hosking added that the company had restructured its business to clearly define its function and two operating companies – Redbubble and TeePublic – and allow each marketplace to operate more efficiently. 

He also ensured that the company retained its capability to make targeted investments in initiatives that have delivered or are expected to deliver financial returns.

“We believe that the steps we are taking today will best position us to bring forward our return to cash flow positive,” Hosking said.

“Once achieved, we will be on a strong footing to explore future growth opportunities to unlock the group’s tremendous potential.”

With the cost reduction measures in place, the company expects its FY23 operating expenses to be between $125 and $130 million.