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· Posted on
February 21, 2024

The gloves are off at Ansell after it warns investors of a gloomy financial forecast

Ansell is experiencing a major oversupply issue... because the demand for them just ain't there anymore.

What's the key learning?

  • Ansell's gloves and surgical suits sold like hotcakes during the height of COVID, but now it has had to slow production and warn investors of earnings downgrade.
  • Earnings downgrade is when a company announces to the market that it expects financial performance to decline in the not too distant future.
  • When this downgrade was announced last week, shares in Ansell fell 14 per cent, down $4.01 to $23.76.

👉 Background: Ansell is the Australian company that manufactures industrial and medical gloves. It was previously very well known as a condom manufacturer... but it sold that division in 2017.

👉 What happened: During the height of COVID, Ansell's gloves and surgical suits sold like hotcakes. But now, Ansell is experiencing a major oversupply issue - and the demand just ain't there anymore for their protective gear.  

👉 What else: As a result, Ansell has had to slow production and warn investors of another earnings downgrade - which has reaaaally hurt its share price.

What's the key learning?

💡Earnings downgrades are like the plot twists in a thriller novel... you have a feeling something might be coming, but you just never know what to expect. Essentially, it's when a company announces to the market that it expects financial performance to decline in the not too distant future.

💡When this downgrade was announced last week, shares in Ansell fell 14 per cent, down $4.01 to $23.76.

💡Last month, Domino's Pizza also announced an earnings downgrade after weak trading. And with many other companies beginning to release their earnings, it will be interesting to see whether these downgrades happen across the board.

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