Dusk share price storms higher following FY22 trading update

A woman's hair is blown back and her face is in shock at this big news.A woman's hair is blown back and her face is in shock at this big news.

The Dusk Group Ltd (ASX: DSK) share is blowing away the broader ASX market today.

This comes after the company released a trading update for the FY22 period.

At the time of writing, the specialty retailer’s shares are up 9.35% at $2.34, after reaching a two-month high of $2.36 earlier in trade.

In contrast, the All Ordinaries Index (ASX: XAO) is 1.91% higher following a positive lead on Wall Street overnight.

Dusk shares rebound amid soft FY22 result

Investors are driving the Dusk share price higher despite the company’s weakened FY22 performance.

According to its release, Dusk delivered the results on the unaudited accounts of the 53 weeks ending 3 July 2022.

The challenging environment associated with COVID-19 led to government-mandated store closures in the first half of FY22. This saw a reduced number of store trading days by approximately 24%, or 5,483 trading days lost.

As such, Dusk expects sales figures to be at approximately $138.3 million. That compares to $148.6 million in FY21, down 6.9%.

Total like-for-like (LFL) sales is forecast to go down by 10.5%, cycling from the 32.7% surge in FY21.

However, the company projects online sales to grow by 2.9%, adding to the 27% increase in the prior comparable year.

In addition, pro forma EBIT is set to range between $26.3 million to $26.8 million against the $38.4 million achieved in FY21.

Dusk predicts net cash to be around $21.3 million at period end, with inventory of $15.4 million.

The company now has 132 stores (including an online store) after opening 10 new stores throughout the year.

Dusk CEO and managing director Peter King touched on the company’s outlook, saying:

Dusk’s vertical retail model and long-term supply partnerships has ensured our inventory levels have remained well balanced to meet demand.

As we commence FY23, we are comfortable with the quality and quantity of our inventory position. Our Christmas orders have been placed and we do not expect any material impediment to inventory inflows ahead of our key trading period.

We have completed negotiations to open a further five stores in Australia before Christmas and three stores will open in New Zealand during September and October.

Dusk share price snapshot

After hitting a 52-week low of $1.55 on 15 June, the Dusk share price has rebounded strongly by about 50%.

However, when looking at year to date, the company’s shares are down 26%.

Dusk commands a market capitalisation of roughly $133.25 million.

The post Dusk share price storms higher following FY22 trading update appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dusk Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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