Nick Scali reported an EBIT result of $130 million for FY24, down 16%. Gross margin of 65.5% for the group and 66.0% the Australia and New Zealand (ANZ) division was a standout and record. For FY25e we expect to see modest store openings, an improvement in per store sales growth momentum from ANZ and moderate cost growth. A catalyst to the upside would be a lower sea freight rate environment and progress in the UK.

Nick Scali is a furniture retailer that has exhibited consistent growth over the long term. We see the store network growing to 153 over the next four years to FY27e, a compound annual growth rate of 9%. New stores will come in both existing markets and the newly entered UK market. The opportunistic, low-cost entry into the UK sets a base from which to expand the Nick Scali brand into the UK.