COVID-19 furniture boom sent Nick Scali’s profit up 100%, but will it continue?
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Nick Scali (ASX:NCK) has become the latest furniture retailer to reveal just how big a boost COVID-19 was its profits.
One was Temple & Webster (ASX:TPW) which last week announced an 85% jump in revenues and 141% gain in earnings.
Nick Scali has followed suit announcing a 100% gain in its profit from $42.1 million to $84.2 mullion.
The company also upped its revenues by 42.1% to $373 million from $262.5 million.
Weighing in on the results, managing director Anthony Scali said the best aspect of the results were, “the ability of our distribution network across Australia and New Zealand to deliver the materially elevated sales revenue whilst maintaining the same level of costs as FY20.”
The company’s online sales grew from $3 million in FY20 to $18.3 million and it opened three new showrooms, taking its total to 61.
Shares slightly fell today but are up 74% since the start of 2020.
While NCK said trading had been strong, it declined to provide guidance for FY22 in light of the current situation in Australia with the delta-driven lockdowns.
“Despite the buoyant trading conditions, there is a high degree of uncertainty in the current retail environment, due to current and potential future lockdowns, supply chain challenges caused by lockdowns in sourcing countries, as well as the continuing escalation of global shipping costs,” the company said.
Its written sales orders in July were down 27% compared to 12 months ago, but up 24% compared to two years ago.
It was an even better story across the Tasman, with written sales orders growing 91% in NZ for July 2021 on top of 95% growth across FY21 compared to FY20.
The company announced a final dividend of 25 cents per share bringing the full year’s dividend to 65 cents per share.