Shares in Nick Scali experienced a significant drop on Friday following the release of sales figures from Australia and New Zealand that fell short of expectations. This downturn occurred despite a robust performance from the company’s stores located in the United Kingdom. Nick Scali is a furniture retail company that designs, sources, and sells furniture through its network of stores and online platforms. The company operates across Australia, New Zealand, and the United Kingdom.
Citi analyst Sam Teeger noted that Nick Scali’s first-half net profit of $41 million surpassed consensus estimates by 8.7 per cent and exceeded the company’s own guidance of $37 to $39 million. Furthermore, gross margins reached 65.4 per cent, exceeding expectations, driven by a 1.5 percentage point expansion in Australia and New Zealand, along with stronger-than-anticipated margins in the UK market.
However, written sales in Australia and New Zealand for January showed a more modest increase of only 3.2 per cent, falling short of the anticipated 11 per cent growth. Teeger highlighted that this weaker-than-expected performance raises concerns about the company’s ability to meet revenue forecasts for the second half of the year. Increasing interest rates and soft competition may pose challenges to achieving consensus revenue forecasts for the second half of fiscal year 2026.
At the close of trading, shares in Nick Scali were down by 15.5 per cent, reflecting investor concerns about the sales slowdown in the Australian and New Zealand markets.
