Nick Scali shares have jumped in early trade after the furniture retailer beat its underlying first-half profit guidance, though its net result fell by 15.7 per cent to $21.4 million amid a “fragile consumer environment”.
The company said revenue for the six months to December 31 fell by 2.5 per cent to $137.5 million, weighed down by a horror first quarter when it experienced a “significant drop in store traffic” and negative comparable store sales growth of 8.3 per cent.
However, it said its underlying interim profit result of $20.1 million beat guidance offered in October of between $17 million to $19 million.
Shares in the company rose as high as $7.74 in early trade on Thursday and at 1020 AEDT were still 3.74 per cent higher at $7.52.
Nick Scali said sales also picked up during the second quarter to help it keep its interim dividend unchanged at 25 cents per share, fully franked.
Despite seeing a recent improvement in sales and store traffic, with second quarter written orders up by 3.5 per cent on a comparable store basis, Nick Scali on Thursday told the ASX there was “still uncertainty around the current level of consumer confidence”.
“(This) has been exacerbated by the coronavirus outbreak and other factors, and consequently it is very difficult to provide guidance as to the profitability for the full year to June 2020,” it said.
For the month of January, which the company says is its biggest trading month, written orders declined 1.7 per cent.
One Nick Scali store was opened in Auckland in the second half of 2019 as the company increased its network to 58, with a further three new stores – two in Victoria and one in New Zealand – expected to open in the second half of the financial year.
AAP
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