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Highlights

  • Universal Store is an Australia-based company which is engaged in the retailing of casual youth fashion apparel
  • In FY23, the company witnessed 26.5% YoY growth in sales to AUD 2263.1 million
  • By 30 June 2024, the company intends to open 104-107 outlets

Universal Store Holdings Limited (ASX: UNI) is an ASX-listed retailer with specialization in casual women’s and men’s gifting, lifestyle, accessories and fashion. The company operates via two segments – CTC (Cheap Thrills Cycles) and Universal stores. The CTC store designs, retails and wholesales casual youth fashion apparel.

In the financial year 2023 (FY23), the company registered 26.5% YoY growth in sales to AUD 263.1 million, backed by 23.9% YoY growth in B&M sales and 2.4% YoY increase in LFL (like-for-like) sales. However, online sales in LFL dropped by 4.5% during the reported period.

The period saw 17.7% YoY growth in underlying EBITDA to AUD 67.2 million and 21.9% YoY increase in NPAT to AUD 25.6 million.

Sectoral growth prospects and risks

As per the data published by the Australian Bureau of Statistics (ABS), in November 2023, household spending of Aussies increased by 3.1% YoY and spending on non-discretionary items grew by 5.8% YoY with the increase in transport and health spending by 8.3% and 7.8%, respectively.

All Australian states and territories reported a surge in household spending. The maximum increase in spending is reported by the Northern Territory with the increase of 8.7%, followed by South Australia and Western Australia, with the increase of 5.2% and 4.6%, respectively.

The data by ABS indicated that discretionary spending grew by 0.3% in November 2023, compared to non-discretionary spending growth of 5.8%.

In August to November 2023, job vacancies decreased by a smaller rate, compared to 8% drop in the three months to Augst 2023.

Job vacancies in industries like arts and recreation services and accommodation and food services were high in comparison to pre-COVID levels.   

Recent business update

Through an ASX-filing dated 20 November 2023, the company notified that it has recorded 17.7% pcp growth in sales to AUD 88.4 million during the four months of FY24. It was underpinned by higher contributions from the CTC segment. During the reported period, the underlying gross margin was consistent with pcp, that is 59%.

On 21 December 2023, the company informed that under an employee incentive program, it had issued 549,306 performance right shares on 20 December 2023.

Outlook

The company has maintained consistency in profit margin by maintaining fresh inventory that can appeal customers. The direct-to-consumer and wholesale channels are performing well and the wholesale order book is increasing by double digit in the first half of FY24.

The company is committed to introducing new and appealing products and brands that can address the ever-changing needs of customers. In FY24, the company expects to open 4-6 new stores in the US, 5-8 for PS and 1-2 for THRILLS. The goal is to establish 104-107 outlets by 30 June 2024. 

Share performance of UNI

UNI shares closed 5.52% up at AUD4.40 apiece on 15 January 2024. Including today’s gain, UNI’s share price has dropped by 16.98% in the last one year and has increased by around 32.13% in the past three months.

The 52-week high of UNI is AUD 6.19 recorded on 30 January 2023, and the 52-week low is AUD 2.45, recorded on 26 June 2023.

UNI Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 15 January 2024. The reference data in this report has been partly sourced from REFINITIV.