Here’s a surprise profit upgrade – from retailing, and from the furniture side of the sector at that. Nick Scali (NCK), the Sydney based furniture retailer says that despite a slowdown in the current quarter, it will be reporting higher sales and earnings (after a strong first half) in August.
The company has been experiencing strong sales and earnings growth for more than a year and yesterday it told the ASX that while there would be a slowdown in same store sales in the 4th quarter, total orders for the year "will be up on last year."
"The full year result has built on the strong first half and robust sales orders taken in the 3rd quarter of the year. Whilst 4th quarter written orders in total will be up on last year, trading conditions have once again been volatile."
"Coming off the back of an exceptionally strong quarter last year, comparable stores written orders will be marginally down in the 4th quarter."
The company forecast profit will be up 36% in the year to June 30 from 2012, or around $17.2 million (on a before tax basis).
"The underlying Net Profit after Tax (NPAT) result is expected to be approximately $12.0m, up 36% on the FY12 result of $9.0m.
"In addition to the underlying profit, the Company received a one off compensation benefit from the NSW Government for the closure of the Nick Scali and Sofas2Go stores located at Bella Vista. The total benefit of compensation will be approximately $3.6m, after taking into account tax and costs associated with the closures.
"As a result, the full year statutory NPAT result is expected to be around $15.6m," directors said.
Earlier this year, Nick Scali reported a 23% increase in net profit for the first half and a 17% increase in sales.
The company releases its full year figures on August 15.
NCK 1Y – Scali provides a rare upgrade, from retailing
