Shares in furniture retailer Nick Scali have suffered the steepest dive in two years, despite record revenue for the back half of 2022, and better-than-expected January sales orders.
Nick Scali saw revenue leap 57 per cent during the final six months of 2022, to a record $283.9 million.
Profits jumped 70 per cent to $60.6 million, with the company announcing a 14.3 per cent jump in its interim dividend to 40c a share. The gross margin jumped 2.5 per cent, to 62 per cent for the period.
The company also added revenue from Plush-Think Sofas, which the company bought at the end of 2021.
In addition, sales orders for January were close to 23 per cent above pre-pandemic levels.
Yet shares were down 11.43 per cent at 11:30am this morning, to $11.
Investors are seemingly spooked by Nick Scali declining to provide guidance for the first half of calendar 2023, saying its fortunes would “depend upon trading during February to April and at this point it is difficult to provide”.
Despite the 23 per cent leap in January sales orders, brand written sales were down 12.1 per cent below the same period in January 2022.
The month is the busiest sales period of the year for Nick Scali.
“Record revenue in the half has been a tremendous achievement by our distribution teams which demonstrates the operational capacity in the business to support future volume growth,” said Nick Scali chief executive Anthony Scali.
“The integration of Plush is now complete with IT and distribution operations integrated during the half and we are well placed to grow our store network under both brands.
“In the second half of 2023 we are commencing a twelve-month program of refurbishment of over 40 Plush stores with new and improved product, image and store appeal to customers.
“We are excited about the potential to improve foot traffic and conversion in the current Plush store network.”