Investing.com --Inchcape PLC (LON:INCH) lowered its full-year operating margin outlook on Thursday as intensifying competition and weaker performance in Australia offset continued growth across its Americas and Europe & Africa businesses.
The automotive distributor now expects a 2026 operating margin of around 5.5%, down from its previous forecast of approximately 6%, while adjusted earnings per share growth is expected to reach around 10%, compared with previous guidance for growth of more than 10%.
The company maintained its organic volume growth outlook at the upper end of its 3% to 5% guidance range and free cash flow conversion above 100%.
Group volumes increased 3% in the third quarter, against 9% growth in total industry volumes across its markets. Organic revenue growth was 1%, while reported revenue rose 7% to £2.5 billion.
Performance diverged sharply by region. Americas volumes increased 10%, compared with industry growth of 24%, while Europe & Africa volumes rose 21%, including 16% organic growth, against industry growth of 2%.
In Asia-Pacific, volumes fell 37% despite 5% industry growth. Australia was the main drag, with Inchcape's volumes plunging 50% as fuel-related disruption accelerated the shift towards new energy vehicles and its key brand partner lost competitiveness.
"Australia remains a challenge - our key brand has underperformed, with deteriorating competitiveness in a rapidly-evolving market," Chief Executive Duncan Tait said.
He added that the company was taking further decisive action alongside existing restructuring measures, including a comprehensive review of its product range and positioning with its brand partner.
The company retained its medium-term ambition of delivering adjusted EPS compound annual growth of more than 10% through 2030.
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