Subscribe
Nick Scali shares plunge as shoppers tighten purse strings
Furniture giant Nick Scali has seen its share price plunge by up to 23 per cent in trade today after advising shareholders that orders were lower than expected.
- Furniture giant Nick Scali has seen its share price plunge by up to 23 per cent in early trade today after advising shareholders that orders were lower than expected.
- In a note to the ASX, the business said written sales were 15 per cent below the last corresponding period.
- Analysts suggest that the rising cost of living is causing shoppers to avoid discretionary spending such as expensive lounges and furniture.
Furniture giant Nick Scali saw its share price drop up to 23 per cent in early trade on Thursday after advising shareholders that it was experiencing a sharp drop in expected earnings.
At the time of publishing, Nick Scali’s share price was trading at $11.74 a share, down 17 per cent.
It followed a note published to the ASX stating that after tough market conditions, the furniture retailer now expects profit after tax for the six months ending 31 December 2026 to be between $28 million and $32 million.
“Trading conditions in Australia and New Zealand remained challenging during the first quarter, with written sales orders 15 per cent below the prior corresponding period and store traffic approximately 10 per cent lower,” the business said.
“ANZ revenue for the first half is expected to be approximately 11 per cent to 14 per cent below the prior corresponding period.”
The North Ryde-headquartered business also flagged that a cybersecurity incident in August, which was public knowledge, took the furniture giant’s electronic payment tracking system offline for three weeks.
During the incident, Nick Scali stores traded as normal and processed orders manually, but the business said it now expects consultant and legal costs of around $980,000 as a result of the attack.
Nick Scali operates 132 stores worldwide, including over 70 showrooms across Australia and New Zealand under the main brand, plus subsidiary and international networks.
In August this year, when the business released its full-year results, CEO and Managing Director Anthony Scali said on an earnings call that Australia’s macro environment was challenging.
“The macro is not good at all; it is one of the worst for furniture,” he said.
“We have house prices going down, creating a negative wealth effect, interest rate increases, inflation, cost of living pressures, and housing transactions have been slow for six months.
“It’s a very tough and volatile environment, and it’s difficult to predict.
“We are hoping that if the war stops, oil comes back down, inflation is controlled, and interest rates drop, it would certainly be helpful.”
Despite the challenging conditions in Australia and New Zealand, Nick Scali said its UK business was performing well.
“The UK business has continued to improve, with written sales orders for the first quarter 29 per cent above the prior corresponding period and like-for-like written sales orders increasing 14 per cent,” the business said.
“The difference between total and like-for-like growth reflects, in part, stores which were temporarily closed for refurbishment during the prior corresponding period.
“The Company expects to open one new UK store in late December as it continues to expand the Nick Scali store network in the UK.”