dusk reported sales growth of 14% in 2H26 and full year growth of 8.4%. Gross margins improved 279bp in 2H26 driven by promotional discipline, currency benefits and improved logistics.

Nick Scali delivered FY26 EBIT of $125 million, up 18%. Sales growth underwhelmed with a weak second half. Gross margin improved in FY26 to 65.6% up 207bp. The flat trading update for written sales orders signalled an improvement in momentum but it might be temporary. We have lowered our sales forecasts on our expectations of a tougher environment but lifted our gross margin expectations. We need to see more evidence of improving sales before getting positive on the sales recovery.

Metcash’s FY26 EBIT of $504 million, declined by 1%. Additional detail about its trading conditions early FY27e look promising. However, the company will have a number of hurdles that result in only 1% EBIT growth for FY27e on our estimates. The improvement in sales trends for Metcash will come from tobacco, which is low margin. Recent investments in retail stores and IT systems will lift depreciation and interest costs.