Nick Scali slumps despite reporting 23.1% increase in HY profit
Make us a preferred source
Make us a preferred source on Google
More news: Shares in Nick Scali slumped in morning trade despite the company reporting a 23.1% increase in net profit and higher dividend in first-half.
Shares were 18.95% lower to $19.29 at 12:20pm AEDT.
Citi analyst Sam Teegar reiterated a "buy" rating on the stock and set a 12-month target price to $27.95. However, he flagged risks to achieving the target, including slowdown in the broader housing market, rising interest rates, increased competition and currency fluctuations.
Teegar said that if the impact of any of these factors is greater than anticipated, the stock will struggle to meet his earnings forecasts and price target.
Nick Scali notches 23% increase in HY profit, lifts dividend
The news: Furniture retailer Nick Scali reported a 23.1% increase in first-half net profit to $41 million, after Australia and New Zealand sales climbed 13% and gross profit margin improved across the group.
The profit result outstripped consensus estimates of $37.7 million, according to Visible Alpha data.
The company declared an interim dividend of 39 cents per share, up from 30 cents a year earlier, and above consensus estimates of 32 cents per share.
The context: Executive chair and CEO Anthony Scali said "good progress" was made in the UK as the completion of store refurbishments and rebranding contributed to improvement in written sale orders.
He said the group is continuing to grow its store network across ANZ with six new stores to be opened in FY26, and "several new store opportunities" currently under negotiation in the UK.
The sources: ASX, Citi analyst note
