Nick Scali (NCK) $6.20 as at 15/10/2019
Mid-tier furniture retailer Nick Scali has seen its shares tumble as much as 22% this afternoon after a midday release to market that showed a dive in sales. The trading update noted falling store traffic which had led to falling LFL sales, “which are currently down 8% YTD compared with the previous year.”
The company had already noted slowing sales at the full year result in August, however conditions appear to have deteriorated enough to lower guidance with the company now expecting $17m-$19m NPAT for the first half, well below the $25m seen in 1H18.
Nick Scali blamed the fall in customers on a deteriorating housing market. Although clearance rates and prices seem to have been on the improve across much of Australia, volume remains a key issue. The company had been doing a decent job of fighting the housing market decline over recent years but now it looks like it’s starting to bite. The market was looking for flat year on year earnings at around $42m in FY20.
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