Nick Scali’s AGM guidance was a miss to Visible Alpha consensus for 1H26e. However, the trading update showed strong sales momentum in ANZ and a clear path to breakeven in the UK. The ANZ guidance implies either flat gross margins or elevated costs. Sales momentum will need to continue in a highly promotional environment to offset cost growth. The UK is tracking well to reach breakeven and could exit 2H26e with a small profit. The promotional environment in ANZ presents a risk to gross margins.