Brambles shares are tanking

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Shares in Brambles fell hard in early trade after the logistics company announced a profit downgrade.

A short time ago, they were down 14% to $10.54.

In a first half update, Brambles says it now expects full year sales and profit to be below the current guidance range of underlying profit growth of 9% to 11% and revenue revenue 7% to 9%.

The company says it expects first-half sales revenue growth of about 5% and underlying profit growth of about 3%.

CEO, Tom Gorman says sales are growing in every operating unit except the North America pallets business.

“In our North America pallets business, we experienced some revenue and cost pressures during the back end of the first half,” he says.

“These pressures were partly due to US retailer destocking which impacted volumes and resulted in increased transport and plant costs associated with higher-than-expected pallet returns.”

In August, Brambles posted a flat underlying profit of $US$623.1 million ($A824 million). On a constant currency basis, that was an 8% rise.

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