Highlights

  • Australia and New Zealand written sales orders declined 15% in Q1 FY27.
  • Store traffic across Australia and New Zealand was approximately 10% lower.
  • The company expects first-half ANZ revenue to decline approximately 11%–14%.
  • UK written orders increased 29%, including 14% like-for-like growth.
  • Underlying group profit after tax guidance for the December half is $28 million–$32 million.

Nick Scali Limited (ASX:NCK) sells sofas, dining furniture, bedroom products and home accessories through its furniture retail business. Its October 2026 trading update points to reduced customer orders in Australia and New Zealand, contrasting with growth in the United Kingdom, and sets out earnings expectations for the first half of FY27.

Australian and New Zealand Orders Decline

In the quarter to September 2026, written sales orders across Australia and New Zealand fell 15% compared with Q1 FY26. Store traffic was approximately 10% lower. The order decline followed 11% growth in the comparable quarter, highlighting a change in demand conditions across the group’s established markets.

Nick Scali Limited (ASX:NCK) expects revenue from Australia and New Zealand for the six months ending 31 December 2026 to be approximately 11%–14% below the prior corresponding period. These are company expectations rather than completed half-year results. Written orders measure customer orders received, while recognised revenue depends on the timing of delivery and applicable accounting recognition.

UK Trading Moves in a Different Direction

The UK business recorded a 29% year-on-year increase in written sales orders during Q1 FY27. On a like-for-like basis, orders increased 14%. Nick Scali Limited (ASX:NCK) said the difference partly reflects UK stores that had temporarily closed for refurbishment in the corresponding quarter.

Two new stores opened in Australia and New Zealand in July 2026. The retailer expects two more to open there in late December, along with one additional UK store. These planned openings would extend the store network while the company manages weaker trading conditions in its main markets.

Profit Guidance and Cyber Incident Costs

Based on trading to date and its current order bank, Nick Scali Limited (ASX:NCK) expects underlying group net profit after tax of $28 million–$32 million for the six months ending 31 December 2026. The range remains guidance, subject to trading through the rest of the reporting period.

An August 2026 cyber security incident made the company’s enterprise resource planning systems unavailable for approximately three weeks. Stores continued operating and processed orders manually during that period. The company identified approximately $980,000 in direct consultant and legal adviser expenses associated with the incident, excluded from underlying profit guidance and to be presented separately as non-underlying costs.

Operational Priorities and Reporting Factors

Nick Scali Limited (ASX:NCK) identified gross-margin management, cost discipline, store expansion and further improvements in its UK operations as its priorities. Lower order intake and store traffic remain relevant to the near-term revenue outlook, while differences in market performance mean that the Australian and New Zealand and UK businesses need to be assessed separately.

The half-year financial results will clarify reported revenue, margins, the effect of the cyber incident and how the group performed against its stated profit range. Planned late-December openings are another operational milestone, although their contribution to the reporting period has not been quantified.

Key Insights

The October update presents contrasting trading trends: weaker Australian and New Zealand orders alongside increasing UK orders. For Nick Scali Limited (ASX:NCK), the first-half guidance links these conditions to anticipated group profitability. The distinction between underlying earnings and separately disclosed incident costs will also matter when the reported results become available.