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TUI expects 2-4% revenue growth, 7-10% profit rise in 2026

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Shares fall 3.2% after conservative forecast

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Cost cuts planned, focus on efficiency and profitability

(Updates with CEO media call comments throughout, updates share

moves, adds analyst comment)

By Joanna Plucinska and Emanuele Berro

LONDON, Dec 10 (Reuters) - Europe's largest tour

operator TUI on Wednesday gave a more conservative

outlook for 2026 than the market had expected, citing the

current trading environment and prevailing economic and

geopolitical uncertainties.

For 2026, the company expects its revenue to increase by 2%

to 4% and underlying operating profit to rise by 7% to 10%,

meaning it will not sustain growth from 2025 as markets have

assumed.

TUI shares were down 3.2% at 0832 GMT.

CHALLENGES AND COST-CUTTING

The group in November reported preliminary full-year results for

2025 above its own guidance, citing strong performance in the

cruise and hotel sectors. Still, it acknowledged challenges in

some of its markets and Chief Executive Sebastian Ebel said the

group was planning cost cuts in the coming years.

Despite positive growth in the cruises and hotels sectors,

the results showed an overall weaker performance in 2025 for

much of the group's airlines segment throughout Europe.

Ebel said that the more modest outlook, particularly for

revenue, was partially an accounting issue where revenues from

joint ventures in cruises and hotels were not included in TUI's

group numbers.

"All segments will become even more profitable and efficient in

the future," he said in an initial statement.

Airline analyst Dudley Shanley at Goodbody brokers said the

results and outlook were overall positive despite the

challenges.

Underlying earnings before interest and taxes for its fiscal

year, which ended on September 30, came in at 1.46 billion euros

($1.70 billion) at constant currencies, up 12.6% from a year

earlier and ahead of TUI's targeted rise of between 9% and 11%.

TUI has struggled with weakness in its core German market

but has managed to bolster its results by focusing on making its

offer more international and emphasizing its more profitable

businesses.

Ebel said in a media call that the group was "very unsatisfied"

with its current share price, but that a new dividend policy of

0.10 euros per share would help improve the price in the coming

year.

Ebel told journalists that TUI would implement cost-cutting

measures in its markets and airlines segment in an effort to

build efficiency and help the company succeed longer term.

When asked if that meant job cuts, Ebel said, without

elaborating further: "There is a big difference in having less

jobs versus cutting jobs."

He also said that an expected delivery of 20 planes from Boeing ( BA )

in the coming fiscal year would help substantially with

cost saving, allowing upgrades to a more efficient fleet.