Key Highlights

  • Nick Scali reported FY26 Revenue of AUD 516.7 million, increasing 4.3% YoY, while statutory net profit after tax rose 31.2% to AUD 75.7 million.
  • Q1 FY27 written sales orders declined 15% YoY across Australia and New Zealand, while store traffic decreased approximately 10%.
  • The company expects H1 FY27 underlying net profit after tax of AUD 28–32 million, reflecting weaker domestic furniture demand.
  • UK written sales orders increased 29% YoY during Q1 FY27, with like-for-like orders rising 14%, supporting continued international expansion.

Nick Scali Limited (ASX:NCK) operates a furniture retail Business across Australia, New Zealand and the United Kingdom, offering sofas, dining furniture, bedroom furnishings and home accessories. Its principal brands include Nick Scali and Plush, while its UK operations have undergone store refurbishment and rebranding. Following increased revenue and profitability during FY26, the company experienced weaker Australian and New Zealand trading conditions in Q1 FY27. Lower customer traffic and written orders prompted revised first-half Earnings expectations, although continued growth in the UK provided an encouraging development.

FY26 Financial Performance and Retail Operations

For the financial year ended 30 June 2026, Nick Scali reported group revenue of AUD 516.7 million, representing 4.3% growth compared with FY25.

Statutory net profit after tax increased 31.2% to AUD 75.7 million, supported by improved gross margins and operating efficiency.

Group gross profit Margin expanded to 65.6%, compared with 63.5% in FY25.

Australian and New Zealand revenue increased 5.1% to AUD 476.7 million, reflecting higher sales and improved trading during H1 FY26.

The UK business generated approximately AUD 40 million in revenue, while gross margin increased to 60.3% from 47.1% in the previous financial year.

The UK operations also recorded an underlying net profit of approximately AUD 0.8 million during H2 FY26, reflecting improved trading following store refurbishment activities.

The company declared a fully franked final Dividend of 39 Australian cents per share.

At 30 June 2026, Nick Scali reported net cash after borrowings of AUD 34.9 million, providing financial flexibility for ongoing retail operations and store expansion.

Australian and New Zealand Sales Slowdown

Nick Scali's trading update on 21 October 2026 highlighted weaker furniture Demand across Australia and New Zealand.

During Q1 FY27, written sales orders declined 15% compared with the previous corresponding period.

Customer traffic across the company's Australian and New Zealand showrooms decreased approximately 10%.

The decline contrasted with an 11% increase in written orders during Q1 FY26, reflecting a more challenging comparative trading environment.

Furniture purchases are sensitive to household discretionary spending, consumer confidence, borrowing costs and residential property activity.

Lower showroom visits and reduced order volumes can affect future revenue because furniture sales are generally recognised when products are delivered rather than when customers place orders.

Management expects H1 FY27 Australian and New Zealand revenue to decline approximately 11–14% compared with H1 FY26.

The company also anticipates underlying group net profit after tax of AUD 28–32 million for the six months ending 31 December 2026.

These expectations reflect trading conditions and the existing order book, with actual results dependent on customer demand and deliveries.

UK Retail Expansion and Improving Order Growth

Nick Scali's UK operations continued demonstrating encouraging demand during Q1 FY27.

Written sales orders increased 29% YoY, while like-for-like written orders grew 14%.

The difference between total and comparable growth partly reflected the reopening of showrooms following refurbishment activities during the previous corresponding period.

The company continues converting and upgrading its UK store network under the Nick Scali brand.

Its expansion strategy includes additional showroom openings and improved operating efficiency across the existing portfolio.

A new UK showroom is expected to open in December 2026, supporting further development of the business.

However, the UK operations remain considerably smaller than the Australian and New Zealand business.

Consequently, continued UK order growth may provide additional revenue opportunities but is unlikely to fully offset weaker domestic demand in the near term.

Cybersecurity Incident and Operational Continuity

During August 2026, Nick Scali experienced a Cybersecurity incident that temporarily affected its enterprise resource planning systems.

The disruption resulted in system unavailability for approximately three weeks, although stores continued operating and processing customer orders manually.

The company incurred approximately AUD 980,000 in consulting and legal expenses associated with the incident.

These expenses are expected to be classified as non-underlying items and excluded from H1 FY27 Underlying Profit guidance.

The incident highlights the importance of cybersecurity, operational resilience and business continuity for retailers managing customer orders, inventory and delivery schedules.

Nick Scali continues prioritising system reliability and operational efficiency alongside its retail expansion activities.

FY27 Outlook and Business Risks

Nick Scali's near-term performance remains dependent on Australian and New Zealand consumer demand, showroom traffic and the conversion of written orders into delivered sales.

The company is continuing its store development programme despite weaker domestic trading conditions.

Two new Australian and New Zealand stores opened during July 2026, with a further two openings expected in late December.

Management remains focused on gross margin management, controlling operating expenditure and improving showroom productivity.

However, lower sales volumes could affect profitability because retail operations carry fixed expenses, including rent, employment and property-related costs.

Additional risks include foreign-exchange movements, imported furniture costs, Supply chain disruptions and increased competition across physical and online furniture retail.

The H1 FY27 results will provide further information on whether trading conditions have stabilised and whether UK growth continues supporting the group's earnings.

Key Insights

Nick Scali Limited (ASX:NCK) delivered improved revenue and profitability in FY26, supported by higher gross margins and progress in its UK operations. However, declining Australian and New Zealand written sales orders during Q1 FY27 prompted lower first-half earnings guidance. Continued UK expansion provides opportunities for future growth, although the domestic business remains the principal earnings contributor. Stabilising customer traffic, maintaining gross margins and managing operating costs will be important for the company's FY27 performance.