Nick Scali Defies Retail Gloom
Get More Commentary, Discussion & Market Information On -
Sydney-based furniture retailer, Nick Scali has lifted interim divided by 2 cents to 16 cents (fully franked) after boosted earnings by 15% in the December half year.
Nick Scali made a net profit of $23.5 million in the six months to December 31 on an 8% lift in sales to $128 million.
But the company indicated that the solid first half sales performance has turned down in January.
Directors said orders had been lower in January after a positive December, and it described its same store sales growth of a solid 2.6% in the half year to December, as “challenging”.
Nick Scali’s same store sales growth in the first half of 2016-17 was a boom like 11.6% so there had been a notable slowdown in the intervening 12 months.
Managing director Anthony Scali said there wasn't anything material that impacted January trading, and the company is in good shape.
“It goes to show a bit of volatility with the consumer," he said. "It's difficult because we are coming off really high bases from the last two years."
"If I Iook at the first week of February it was positive again, so there is nothing untoward that's concerning me about it."
Mr Scali says six new stores opened in the six months to December, and they performed above expectations.
The company expects its full-year profit to be between five and 10 per cent higher than the $37.2 million it made in 2016-17.
"Same store sales are going to be challenging going forward, what's going to underpin our profit will be these new stores," Mr Scali said.
Another two new stores are set to open in the second half of 2017-18 or early in the first half of the 2018-19 year, with a long term target of 75 stores, up from 52 currently across Australia and New Zealand.
Nick Scali shares fell 1.1% to $6.90 in yesterday’s solid rebound, so investors were wary.
The companys aid yesterday that the former David Jones finance director, Stephen Goddard will join the board as an independent non-executive director from March 1. Mr Goddard also is a non-executive director of JB Hi-Fi, GWA Group and Accent Group.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.