Volatile sales impact Nick Scali's outlook
A sales boost from new stores in Australia and New Zealand has helped lift furniture retailer Nick Scali's first-half profit by 15 per cent, but its recent sales have been volatile.
The company had lower orders in January after a positive December, and it described its same store sales growth of 2.6 per cent in the half year to December as "challenging".
Nick Scali's same store sales growth was 11.6 per cent in the previous corresponding period.
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."
Nick Scali made a net profit of $23.5 million in the six months to December 31 as revenue year rose eight per cent to $128 million.
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 2018/19 year, with a long term target of 75 stores, up from 52 currently.
Mr Scali said the company may expand into other countries given the right opportunities, and hoped to open at least eight to 10 stores in New Zealand, after its Auckland store was the best performing new store in January, in terms of sales orders.
Nick Scali shares dropped eight cents, or 1.2 per cent, to $6.90 in a stronger market.
NEW STORES GIVE NICK SCALI A PROFIT BOOST
* Half year net profit up 15pct to $23.5m
* Sales revenue up 8.1pct to $128m
* Interim dividend up 2 cents to 16 cents, fully franked
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