Tips for ASX reporting season: Sell your losers
History shows stocks that miss earnings rarely bounce back quickly. Here's why buying the dip is usually a mistake.
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KEY POINTS
- Stocks that miss earnings expectations fall an average 6.3% on results day and continue declining to 8.4% lower four months later, based on 16 reporting seasons from 2008 to 2024
- Eight ASX 200 stocks hit 52-week lows in September 2025 after earnings misses, falling an average 18.8% on results day before dropping another 9.2% over the following month
- Even defensive names like CSL and Sonic Healthcare continued falling after their earnings misses, with CSL down 20% and Bapcor down 41% months after their initial selloffs
There’s always a lot of angst heading into ASX reporting season, as there's really no edge in predicting whether your stock is going to rocket or plummet off the back of its results.
But if it were to miss, the initial selloff can be ruthless and sharp. The natural response is to either panic sell or hope the stock finds its feet over the coming days (or baghold till the end of time). For the latter, that bounce often never comes.
History suggests that earnings misses are rarely a one-day event. Analysis of the past 16 reporting seasons (2008–2024) shows stocks that miss expectations fall an average 6.3% on the day of the result, based on data compiled by Bell Potter's Richard Coppleson. The damage tends to compound from there, with those same stocks trading 8.4% lower on average four months later.
While you might think nothing of these numbers – I’ll stress again as to why you should take an earnings miss seriously.
Low? Nah lower
In late September, I was running my usual 52-week highs and lows scan.
The scan returned nine S&P/ASX 200 stocks making fresh yearly lows. Mind you, this was when the ASX 200 was up around 8.6% year-to-date and trading less than 2% from its August record high. Upon closer inspection, all (except Telix) had one thing in common – a weaker-than-expected FY25 result and/or guidance.
The average results day decline across these eight stocks was 18.8%, with all companies reporting some form of earnings, dividend or guidance miss.
Here are the results day reactions and key earnings takeaways:
Bapcor (-28.3%): Bapcor pre-released its FY25 earnings on 24 July, flagging weaker earnings, revenue pressure across all divisions and a major balance sheet review that included several material write-downs.
Domino’s Pizza (-21.9%): FY25 results were broadly in line with market expectations, but the stock sold off sharply following a weaker-than-expected trading update and limited disclosure around cost-saving initiatives.
Inghams (-20.2%): Inghams delivered a disappointing result, with revenue, underlying EBITDA and underlying NPAT all missing analyst expectations by 1–8%, alongside a dividend cut and a weaker-than-expected FY26 earnings outlook.
IPH (-19.5%): IPH reported mixed FY25 earnings amid ongoing structural challenges, highlighting continued market share losses in ANZ, weaker US filings and a slower-than-expected recovery across Asia.
CSL (-16.8%): A mixed FY25 result, with NPAT and NPATA EPS beating estimates by 1–2%, but revenue and the total dividend slightly below expectations. Sentiment was weighed down by FY26 NPATA growth guidance of 7–10%, well below some analyst forecasts of 15–16%.
Reece (-16.4%): FY25 EBIT fell 20% year-on-year to $548 million, landing at the bottom end of the company’s $548–558 million guidance range. Outlook commentary pointed to ongoing housing market challenges in both ANZ (“slow recovery anticipated”) and the US (“expect the market to remain constrained for the next 12–18 months”).
Ebos (-14.6%): 2H25 EBITDA came in 5% below expectations, with softer FY26 EBITDA guidance reflecting lower margins on new Community Pharmacy business wins.
Sonic Healthcare (-12.8%): FY25 NPAT missed market expectations by 3%, pathology EBITDA margins of 17.7% were 60bps below consensus, and FY26 guidance also fell short.
Don’t buy the dip
At a glance, you might think an 18.8% one-day selloff brings a stock into deeply oversold territory and due for a bounce. You might also look at the list and see some rather defensive and reliable names like CSL and Sonic Healthcare. But buying the dip would’ve been a horrible idea.
All but one stock continued to slide after the FY25 result, down an average 9.2% by 19 September 2025.
Ticker | Company | Reporting Date | % Chg since |
|---|---|---|---|
CSL | CSL | 19-Aug | -11.50% |
IPH | IPH | 21-Aug | -16.80% |
SHL | Sonic Healthcare | 21-Aug | -11.90% |
ING | Inghams | 22-Aug | -10.90% |
REH | Reece | 25-Aug | 0.30% |
DMP | Domino's Pizza | 27-Aug | -9.60% |
EBO | Ebos Group | 27-Aug | -13.20% |
BAP | Bapcor | 28-Aug | -18.50% |
% Chg through to 19 September 2025
IPH was arguably the most memorable reporting season loser. About a week after its FY25 result, the stock recorded a 19-day losing streak (yep, the stock fell every single session for pretty much a whole month), down a total 19.6%.
If you look at where these stocks are trading today, it's still fairly bearish.
Bapcor is down 41% since the preliminary results day selloff, and CSL is also down 20% (issued an earnings downgrade in Oct-25). Sonic has managed to stabilise in recent months but still down 6.5%, Inghams has also traded relatively sideways but also down around 7%. Domino's managed to bottom and rally 50% since the result amid some takeover speculation late last year, refinancing of $1.05 billion debt and a series of broker upgrades on stabilising trading conditions.
The bottom line
If you treat these post-earnings 'fire sales' as a buying opportunity, you're more likely to set yourself on fire than find a bargain. History doesn't repeat, but it often rhymes. And when it comes to earnings misses, the tune is rarely a happy one.
