Shares in Universal Store Holdings Ltd (ASX: UNI) are being flagged as a buy by brokers, and one is tipping that the already healthy dividend will continue to increase in the coming years.

Solid profit result underpins strong dividend flows

The youth wear retailer on Thursday reported full-year sales of $376.1 million, up 12.9% on the previous year, and an underlying net profit of $40.5 million, up 16.3%.

A fully-franked final dividend of 17 cents per share was declared, bringing the full-year dividend payout to 43 cents per share, for a dividend yield of 5.3%.

Group Chief Executive Officer Alice Barbery said regarding the result:

The team delivered another strong full year result, with robust sales and gross margin growth. This performance reflects the continued excellence in providing our customers with on-trend products, a service-oriented experience and engaging communications. The Group is well positioned heading into FY27. Our observation is that our customer remains willing to spend on quality, on-trend clothing from brands they love. As always, we continue to focus on cost discipline as we invest in our team and system capability to support future growth.

Within the Universal Store stores, the company’s private brands accounted for 51% of sales, while “a strong assortment of third-party brands continues to be a key element of presenting customers with an on-trend offering”.

So far in FY27, total sales are up 9.1% on the same period last year.

Universal Store said it intends to open 16 to 20 stores during the year, comprising nine to 10 Universal Store stores, six to eight Perfect Stranger stores, and one to two Thrills stores.

Brokers say Universal Store shares are looking cheap

UBS said the company’s earnings were higher than consensus estimates and at the top end of guidance.

They said like-for-like sales so far this year were “pleasing in Universal Store and very strong in Perfect Stranger given the tough previous corresponding period”.

UBS has a price target of $9 on Universal Store shares compared to $8.07 at the time of writing.

The broker is also forecasting that the dividend yield will increase each year out to FY30, when it will be 8.7%.

RBC Capital Markets said Universal’s result was good, “with clean beats on all metrics”.

The broker added that the company’s gross margin outlook looks good and the balance sheet is strong.

They added:

We have no concern over management flexibility to fund the FY27 store rollout.

RBC has a price target of $9.50 on Universal Store.

Universal Store is valued at $540.9 million.

The post This retailer’s dividend yield could top 8% in coming years: Broker appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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 Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX consumer discretionary stock Universal Store Holdings Ltd (ASX: UNI) just soared 17% on the back of earnings results. 

Investors were gobbling up shares in the company following a result that included double-digit revenue growth and ongoing store expansion. 

A new report from Bell Potter suggests this could be a sign of what’s to come over the next 12 months. 

What did the company report?

As reported by Laura Stewart yesterday, the company reported a 12.9% rise in revenue to $376.1 million for FY26, with underlying NPAT up 16.3% to $40.5 million.

Other results included: 

• Underlying net profit after tax (NPAT) of $40.5 million, up 16.3%
• Statutory NPAT of $18.2 million, down 21.6% due to non-cash impairments
• Gross margin of 62.5%, up 1.4 percentage points
• Underlying EBIT of $64.0 million, up 17.2%
• Final fully franked dividend of 17 cents per share (FY total dividends: 43.0 cps). 

Prior to yesterday, this ASX consumer discretionary stock had faced several sector-related headwinds. 

However, it seems the tide could be turning. 

Bell Potter renewed confidence

Following the release, Bell Potter provided updated guidance on this ASX consumer discretionary stock. 

The broker saw the FY26 result as a clear beat, with revenue above guidance and EBIT at the top end, while FY27 trading has started positively despite tough comparables. 

Group retail sales were up 9%, with particularly strong like-for-like growth. 

The biggest positive was the FY27 store-opening guidance of 16-20 stores, well above Bell Potter’s prior estimate. 

They have lifted their forecast to 17 net new stores, putting the core Universal Store network on track to reach around 100 stores by FY28.

Upgraded target price for this ASX consumer discretionary stock

Based on this guidance, Bell Potter retained its buy recommendation. 

It also lifted its price target to $9.70 (previously $9.30). 

From yesterday’s closing price, this indicates a further 17% upside. 

Our TP increases by ~4% to $9.70/share given our modest earnings revisions and time creep. We remain supportive of UNI’s continued ability to gain market share in a niche streetwear/womenswear category as the overall retail sector goes through a cyclical low point in FY27. We see this backed by UNI’s continued execution to attract the selective youth customer spend.

At 15x FY27e P/E and continuing to offer ~9% EBIT growth over FY27-29e (BPe), we retain our optimistic views on UNI as a high quality retailer with a healthy balance sheet and maintain our BUY rating.

The post Why this ASX consumer discretionary stock could be the pick of the sector  appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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 Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Yesterday, Medallion Metals Ltd (ASX: MM8) announced a $60 million placement to support the development of the Ravensthorpe Gold Project and boost growth drilling across its Western Australian portfolio.

What did Medallion Metals report?

• Raised $60 million via a single-tranche placement at $0.48 per share
• 125 million new ordinary shares to be issued to institutional and sophisticated investors
• Total available liquidity post-raise reaches approximately $175 million
• Funding underpins ramp-up to commercial gold-copper production at Ravensthorpe, plus processing at Forrestania
• Proceeds support mine development and accelerated extensional drilling at Kundip and Lounge Lizard

What else do investors need to know?

The fundraise was cornerstoned by respected institutional investors, showing significant confidence in Medallion’s strategy and assets. Proceeds will be used to advance development at Ravensthorpe and Forrestania, allowing the company to meet liquidity requirements for its financing facilities.

With this capital boost, Medallion Metals plans to ramp up exploration, particularly at priority targets such as Kundip and Lounge Lizard. This could enhance the company’s production profile and long-term sustainability.

What did Medallion Metals management say?

Managing Director Paul Bennett said:

Medallion emerges from this capital raising in an extremely strong position to progress to commercial production of gold and copper. Project development activities are advancing rapidly at both Ravensthorpe and Forrestania, with toll treatment expected to commence in October and commissioning of the expanded and modified process plant on Ravensthorpe feed targeted for mid-2027.

With the company’s funding position in excess of the project requirements, we have the ability to accelerate drilling programs at our most prospective targets, with the objective of growing the production profile across our projects. We welcome our new shareholders and appreciate the continued support of our existing shareholders. The backing of this high-quality group of resources investors is a significant endorsement of our team, assets and near-term gold-copper production strategy.

What’s next for Medallion Metals?

The company expects to commence toll treatment at Forrestania in October and aims to commission the upgraded Ravensthorpe plant by mid-2027. With strong financial backing, Medallion can accelerate drilling and advance projects with fewer funding constraints.

Investors can look forward to steady progress reports, including potential resource growth and milestone achievements across the portfolio throughout 2026 and into 2027.

Medallion Metals share price snapshot

Over the past 12 months, Medallion Metals shares have risen 77%, outperforming the All Ordinaries Index (ASX: XAO), which is flat over the same period.

View Original Announcement

The post Medallion Metals bolsters liquidity with $60m placement for production and growth appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.