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.

Sigma Warehouse reported its 1Q26 sales at its AGM. Chemist Warehouse like-for-like sales were up 14.7% for the quarter, an acceleration on FY25 trends. The company highlighted elevated sales of weight-loss drugs like Ozempic as a big contributor. We estimate the contribution is anywhere from 3%-5% of the LFL growth. We expect LFL sales to settle back at 11% in 2Q26e and 9.0% in 2H26e.

dusk reported FY25 sales of $137 million, up 8.7%. Like-for-like (LFL) sales growth of 7.1% meant a 2H25 LFL sales growth of 3.6%. The trading update for the first eight weeks saw total sales down 1.5%, cycling 16% growth in same period last year. We reference the two-year stack in our forecast for LFL sales growth of 4.2% for FY26e. With limited store openings and growth in LFL sales we forecast FY26e revenue forecasts of $144 million, up 4.9%.

Sigma reported FY25 network sales growth for Chemist Warehouse of 14% and EBIT at $903 million, up 47%. The company reported a continuation of double-digit like-for-like sales growth with a lift in profit margins for the underlying Chemist Warehouse business. We forecast EBIT growth of 22% in FY26e ahead of revenue growth of 15%. Margins will be helped by penetration of Wagner private label, operating leverage from strong comp sales and the increasing synergies over the next four years.

Lovisa reported FY25 EBIT of $139 million, up 8%. Gross margins improved 100bp, to 82.0%. The trading update of 5.6% comparable sales growth was an acceleration on the strong 2H25. We lift our sales and gross margin forecasts but also our cost assumptions given 27% cost growth in 2H25.

Harvey Norman reported FY25 PBT growth of 9% with much stronger growth of 19% in 2H25. Sales trends are strong at the start of FY26e, which bodes well for the year ahead. However, the company was lapping a weak result from a year ago. We forecast FY26e comp sales growth of 4.5% for Australia and 6.0% for New Zealand. With better sales, what profit margin upside can we expect? Given Harvey Norman’s margins are near long-term average and cost growth may rise in FY26e, we expect the operating leverage to be a little lower than usual. PBT margins may rise 70bp. We forecast group network sales growth of 6% and PBT growth of 18% in FY26e.

Domino’s reported FY25 EBIT of $198 million, down 5%. The result showed very weak sales trends across all geographies and EBIT margin declines for Asia are a concern given the significant store closures should have improved profitability.  Franchisee profitability is flat and well below healthy levels, raising the risk of more store closures. The decision to reduce discounting is dangerous in our view as the margin uplift may be wiped out by lower transaction volumes.

Nick Scali delivered EBIT of $106 million, down 18%. Gross margins in ANZ were down 100bp but remain elevated on history at 65%. The UK losses at $9.6 million exceeded expectations, with losses guided to continue. Our EPS revisions are a downgrade of 1.6% to FY26e but upgrades of 2.5% and 1.5% to FY27e and FY28e. A large sales uplift is required to break even in the UK, with current conditions supportive domestically. Nick Scali will have to deliver on the UK and on growth in the domestic market.

We initiate coverage on dusk, an Australian specialty retailer of Home Fragrance Products, offering a range of dusk branded products at competitive prices from its physical stores and online store. We see dusk pushing plans to improve sales productivity through new product development, category expansion, increasing the release rate of new product and the opening of more metro stores. 

The agreement with Frasers Group gives Accent Group a 25 year licence to operate Sports Direct in ANZ. Frasers Group will also increase its holding in Accent Group to 19.6% providing $60 million in funding for the initial phase of the rollout. With a 50 store within six years target, Sports Direct provides a new growth path with additional sourcing and product benefits for the group.