Key Highlights

• SkinKandy's piercing studios have been profitable enough to fund expansion.

• It reported its first annual result as a public company.

• South Africa is the next potential market.

• Opening schedule and funding are key to watch.

SkinKandy (ASX:SK1) is expanding because its piercing studios have been profitable enough to fund a fast opening schedule. The ASX-listed retailer reported its first annual result as a public company in September 2026, and it plans 18 to 20 new stores in FY27 before testing markets outside Australia and New Zealand.

A piercing-led retailer

SkinKandy Limited (ASX:SK1) sells piercing services and piercing-related jewellery through its own stores. It listed on 21 May 2026 as ordinary shares, after an initial public offering that raised A$20.0 million of new Capital before costs. The ASX classifies it in Consumer Discretionary, and its about page lists the S&P/ASX Emerging Companies index and the S&P/ASX All Ordinaries Index among its index inclusions.

Piercing-related Revenue made up 61 per cent of FY26 sales, with services at 52 per cent and aftercare at 9 per cent. Fashion jewellery contributed the remaining 39 per cent. The company reports more than 15,000 piercings a week and 770 certified piercers at year end, up from 632, plus more than 1.1 million KandyClub members.

The FY26 result

The company's FY26 covered the 52 weeks to 4 July 2026. Statutory revenue was A$90.5 million, up 26 per cent, and pro forma revenue was A$90.2 million, up 29 per cent. Like-for-like revenue growth was 9.6 per cent.

Statutory and pro forma profits differ sharply. Statutory net profit after tax was A$0.6 million, because about A$11.2 million of offer costs and related items were expensed. Pro forma net profit after tax was A$9.0 million, up 41 per cent.

The pro forma gross Margin was 89.2 per cent and cash conversion was 101 per cent. Cash was A$13.8 million at year end, made up of A$7.8 million in cash and A$6.0 million in term deposits, with no drawn debt. No Dividend has been declared since listing.

Store Economics and the rollout

SkinKandy (ASX:SK1) ended the year with 109 stores after opening 22 and closing none, and six more opened after year end, lifting the count to 115 by the report date. Eleven further leases were approved at that point, pending openings.

In its listing materials, management estimated each new store costs about A$280,000 to open and pays back in around 14 months. These are management estimates, not audited results. Management also estimated a median mature store Earnings margin of 47 per cent, on median store revenue of about A$1.0 million. The company cites a long-term potential network of 180 to 210 stores in Australia and New Zealand.

Early trading was ahead of last year on the company's numbers. The first seven weeks of FY27 were 22 per cent ahead of the prior corresponding period, with gross margin consistent with FY26.

International plans and risks

South Africa is the potential first overseas market, with first stores targeted for the second half of FY27. The company has described an initial entry of two to five stores in one city, while the United Kingdom and United States remain priority markets under development.

The annual report's risk summary is useful reading. It lists store rollout and cannibalisation, discretionary spending, health and safety regulation in piercing, recruiting and retaining piercers, key person dependence, overseas sourcing and cyber security.

Some leases also require landlord consent if control of the company changes. Rapid openings can dilute average store returns if later sites perform below earlier ones, and a younger store estate, with 59 of 109 stores opened in the prior 36 months, has less trading history.

What to watch

The Annual General Meeting notice was lodged on 15 October 2026. Investors can follow the number of openings against the FY27 target of 18 to 20, any announcement confirming South Africa, and the first half result.