By Stuart Condie

SYDNEY--Brambles shares could be on track for their worst day in almost 24 years after the CHEP pallet operator's guidance downgrade wiped about US$3.4 billion from its market capitalization.

Australia-listed Brambles on Monday lowered its revenue and profit guidance for its current fiscal year on what it said were temporary capacity constraints at some of the U.S. service centers that repair its pallets for reuse.

After about 30 minutes of trade, Brambles shares were down 16% at 18.53 Australian dollars, equivalent to US$13.25. The stock hasn't lost that much in a single session since November 2002.

Brambles said that some repair subcontractors had left its U.S. network due to challenging operating conditions, while those left were experiencing labor shortages due to a tightening employment market.

This coincided with unexpectedly high demand and a request from some customers for consistent repair standards, it said.

With pallets taking longer to be put back into circulation, Brambles said it now expects annual sales revenue to grow by between 2% and 3%, compared with previous guidance for 3% to 4% growth.

Brambles, which said it had spent US$60 million on about 2 million new pallets in the June quarter in an effort to ease capacity constraints, expects underlying profit to grow by between 3% and 5%. It had previously flagged 8% to 11% growth.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

May 17, 2026 20:47 ET (00:47 GMT)

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