Nick Scali (NCK) delivers again

Nick Scali (NCK) +10.80%; shot to new 52-week highs today despite falling sales in both LFL and overall metrics as well as falling margins. Nick Scali noted a slip in sales back in October last year, blaming slowing housing sales and renovations for a drop in foot traffic, and subsequently guided the market lower. Today though, the guidance appeared to be conservative with a small rebound in the 2Q helping the half beat the subdued expectations. Sales were down 2.6%, while on a LFL basis, sales were off 7.5%. Margins were squeezed 60bps to 62.2% however NPAT came in at $20.3m for the half, down on 1H19 but nearly 13% above the midpoint of guidance. The company didn’t provide guidance for the full year (which is standard), but they did talk down expectations on lower consumer confidence while January has seen orders down 1.7% on the January of last year. NCK will pay a first half dividend of 25c, a yield of around 6% annualized on where the stock closed today.

Nick Scali (NCK) Chart

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