Fragrances and homewares retailer Dusk Group [ASX:DSK] was up as high as 9% on Friday as FY22 revenue was hit by 1H22 store closures due to COVID.
The company’s FY22 revenue fell 6.9% to $138.4 million as net profit fell 15.5% to $18.5 million.
Year-to-date, Dusk shares are down 25%:
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Dusk’s FY22
These were the key results:
- FY22 revenue down 6.9% to $138.4 million
- Net profit down 15.5% to $18.5 million
- Like for like sales down 10.5%, online sales up 2.9%
- Gross margin fell 7.5% to $93.7 million
- Basic earnings per share fell from 35.1 cents to 29.7 cents
The company said revenue and profit were hampered by store closures in the first half of the year due to lockdowns and that it lost 24% of store trading days in 1H22 due to mandated store closures.
So why are Dusk shares up?
For the first eight weeks of FY23, total sales were up 33% on the prior year’s relevant period.
That said, CEO Peter King noted that such sales comparisons are ‘less insightful’ as Dusk cycles the store closure periods in 1H22.
And if you compare the first eight weeks of FY23 to FY21, total sales are down 6%, albeit up 53% on FY20.
But King was also upbeat the retailer can succeed despite the macroeconomic headwinds:
‘Our experience is that strong execution and offering new, exciting and “on-point” product can “trump” economic conditions, and we are seeing this hold true in the current environment.’
However, management was unable to provide FY23 earnings guidance.
Dusk also highlighted the opening of 10 new stores bumping up the company’s total store count to 132 by the of FY22.
Source: DSK
Dusk outlook
While Dusk was unwilling to offer FY23 guidance, it remained upbeat about the outlook for its business.
CEO Peter King said:
‘There is much to be pleased about in this result when considered in the context of the trading conditions seen in the year, especially in the first half where store closures reduced store trading days by approximately 24% and the Omicron variant reduced foot traffic over summer, including in the important Christmas trading season.
‘For the first eight weeks of FY23, total sales are up 33.2%, or $4.2m versus prior year. We are seeing large channel shifts in our business, with customers returning to stores and sales in the online channel declining materially versus prior year.
‘Although total and LFL sales were lower in FY22, we achieved strong results for Christmas and Mothers’ Day, and pleasing growth on a two-year basis (i.e. since FY20). Importantly, we feel we consolidated the step change in sales and earnings of the business compared to the pre-pandemic period.
‘We continued to prioritise long-term growth, opening ten new stores in Australia, extending our online retailing capabilities, and laying the groundwork for our expansion into New Zealand.’
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Regards,
Kiryll Prakapenka
