Dusk share price soars 9% on resilient full-year results

The Dusk Group Ltd (ASX: DSK) share price is soaring on Friday.

This comes after the company released its full-year results for the 2022 financial year.

At the time of writing, the specialty retailer’s shares are up 8.60%, trading at $2.40.

Dusk share price surges despite profit, revenue fall

• Total revenue down 6.9% to $138.4 million
• Earnings before interest, tax, depreciation and amortisation (EBITDA) down 27.9% to $29.8 million
• Net profit after tax (NPAT) down 31.3% to $18.4 million
• Final dividend of 10 cents per share, fully franked
• Net cash of $21.3 million (no debt) as of 3 July 2022

What happened in FY 2022?

For the 53 weeks ended 3 July, Dusk delivered a solid result despite being heavily impacted in the first half due to COVID-19 government-mandated store closures.

While 5,483 store trading days (approximately 24%) were lost, the group still managed to achieve total sales of 138.4 million, down 6.9% on FY 2021.

Total like-for-like sales (LFL) dropped by 10.5%, cycling from the 32.7% surge experienced in the prior corresponding year.

On a positive note, online sales grew by 2.9% to $11.6 million, representing 8.3% of total sales. The company updated its web platform in August 2021 to be faster, more flexible and more engaging.

Furthermore, Dusk opened 10 new stores in Australia, which have been performing well to date. In total, Dusk now has 132 stores, including the online store.

Inventory stood at $15.4 million, a slight increase compared to the $14.4 million in FY 2021.

What did management say?

Dusk CEO and managing director Peter King had this to say about the results:

There is much to be pleased about in this result when considered in the context of the trading conditions seen in the year, especially in the first half where store closures reduced store trading days by approximately 24% and the Omicron variant reduced foot traffic over summer, including in the important Christmas trading season.

In FY22, we cycled exceptional LFL sales growth of +32.7% in the previous year. Although total and LFL sales were lower in FY22, we achieved strong results for Christmas and Mothers’ Day, and pleasing growth on a two-year basis (i.e. since FY20). Importantly, we feel we consolidated the step change in sales and earnings of the business compared to the pre-pandemic period.

What’s the outlook?

For the first eight weeks of FY 2023, Dusk noted that trading levels were stronger than the previous month of July.

Total sales are up 33.2% when compared to the first eight weeks in FY 2022. The company attributes this to having a full suite of new season merchandise available in-store and online.

Dusk stated that inventory was currently well balanced to meet demand, with orders placed well in advance for the peak Christmas period.

The company refrained from providing earnings guidance for FY 2023 given the continuing uncertain economic environment.

The Dusk share price is down 25% in 2022 after the company recorded heavy falls from April until June.

The post Dusk share price soars 9% on resilient full-year results 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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