Key Highlights

  • Group Revenue was A$516.7 million, up about 4%, and NPAT was A$75.7 million, up 22%.
  • Group gross Margin improved 210 basis points to 65.1%.
  • The UK Business made a loss in the first half and a profit of A$0.8 million in the second, for a full-year net loss of A$4.8 million.
  • In the first five weeks of FY27, ANZ written sales orders were flat and UK orders rose 35%.

Why did Nick Scali's (ASX:NCK) profit grow 22% in FY26 when revenue rose only about 4%? The numbers point to margins: group gross margin improved 210 basis points to 65.1%, and the loss in the United Kingdom narrowed, with a second-half profit.

The FY26 result in brief

Nick Scali Limited (ASX:NCK) reported full-year results on 7 August 2026 for the year to 30 June 2026. Group revenue was A$516.7 million, up about 4%, and net profit after tax (NPAT) was A$75.7 million, up 22%. The company attributed the margin gain to tighter pricing discipline and sourcing efficiencies.

The final Dividend was 39 cents per share, fully franked, bringing the FY26 total to 78 cents, up from 63 cents in FY25. That is a rise of about 24%, somewhat faster than the profit increase.

The 22% profit growth should be read with care. The sources reviewed give the FY26 NPAT figure but do not set out the FY25 base or whether the comparison is statutory or underlying, so the ANZ division's 10% underlying growth is the cleaner indicator of trading performance.

A furniture retailer with two ways to grow

Nick Scali sells furniture, mainly sofas and dining and living-room products, through showrooms in Australia and New Zealand under the Nick Scali brand, and Plush Interiors stores under the Plush brand. It also owns Fabb Furniture in the United Kingdom, which it has been building as a second market.

Revenue depends on written sales orders, which become revenue when goods are delivered. That lag between ordering and delivery means order trends tend to foreshadow revenue, a feature investors often use when reading the company's updates.

Australia and New Zealand carry the profit

The ANZ division recorded revenue of A$476.7 million, up 5.1%, and NPAT of A$80.5 million, up 10% on an underlying basis. Gross margin rose 100 basis points to 66.0%. Written sales orders increased 2.7% for the year, though the second half was softer after high growth in the fourth quarter of FY25.

During FY26 the company opened one Nick Scali store (Ballarat) and three Plush stores (Bendigo, Tuggerah and Cannington), and closed Nick Scali stores at Brisbane Airport and Toowoomba. Two further Nick Scali stores, in Bendigo and Bunbury, opened in July 2026.

The UK turnaround

UK revenue was about A$40 million, slightly lower, partly because of temporary showroom refurbishments. The UK business made a loss in the first half and a profit of A$0.8 million in the second, leaving a full-year net loss of A$4.8 million. Group NPAT of A$75.7 million equals ANZ NPAT of A$80.5 million less that UK loss, which shows how much the UK still weighs on the consolidated result.

Gross margin in the UK improved to 60.3% from 47.1%, and written sales orders rose 31.4% for the year. For showrooms open in both periods, second-half orders were up 19%. Two shared concession stores, at Lincoln and Nottingham, were closed because they did not suit the company's long-term network plans.

The improvement is notable, but one half-year profit of A$0.8 million is a small base. The UK remains a smaller business than ANZ, and it is too early to describe the turnaround as complete.

Trading since 1 July and outlook

In the first five weeks of FY27, ANZ written sales orders were flat on the prior year, which the company described as cycling high single-digit growth. UK orders rose 35% over the same period.

Management was reported as saying that the four stores opened in FY26 and the two opened in July are expected to contribute positively to FY27 earnings. It plans four more store openings in FY27, with further UK expansion as sites are negotiated. The company described itself as cautiously optimistic. No numerical Earnings guidance was identified in the sources reviewed.

Five weeks is a short window, and flat orders in ANZ do not by themselves signal a trend. Cycling a high comparison period can make a flat reading look lower or higher than underlying demand, so later months will be more informative. Similarly, the 35% rise in UK orders is measured from a small base and covers a limited number of showrooms.

Applying the 65.1% gross margin to A$516.7 million of revenue gives Gross Profit of roughly A$336 million. That is our arithmetic, but it shows how a 210 basis point margin gain, worth about A$11 million on this revenue base, can be a meaningful part of a profit increase when sales grow slowly.

Risks and items to monitor

The first is order growth. ANZ orders were flat in the early FY27 period after a softer second half of FY26, so the trajectory from here will shape revenue.

The second is margin sustainability. A 210 basis point gain is large, and the company will need to hold pricing discipline and sourcing efficiencies while managing input costs.

The third is the rollout, which management has said it intends to continue. New stores need time to mature, and openings add rent and staffing before they contribute earnings. The fourth is the UK, where profitability depends on holding the improved margin and growing orders from a small base.

Those disclosures would let them compare actual outcomes with the cautious tone of the FY26 outlook statement.