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Nick Scali profit almost doubles during first half

The furniture space saw strong growth during the Covid-19 pandemic.

Riding the booming homewares market Nick Scali almost doubled net profit for the last six months, the business announced to the market on Thursday.

Sales for the half year to 31 December hit $171.1 million, a 24.4 per cent increase, while net profit leapt to $40.5 million from $20.3 million – a 99.5 per cent jump.

The increase was earned through increased trade compared to the same period a year ago, but also by growing gross profit margin from 62.2 per cent to 64 per cent by reduced discounting.

And to top it off, January 2021 was the largest month of written sales orders the business has ever seen.

“[We] had many challenges to navigate including government mandated store closures, supply chain issues and significant delays experienced with global shipping providers,” said managing director Anthony Scali.

“Despite these events, the team was able to capitalise on shifting consumer spending patterns and deliver a record result.”

With more Aussies and Kiwis shopping from the comfort of their own home, the business’ online sales have almost already exceeded the business’ predictions for the entire year – reaching $3.5 million of Nick Scali’s $4 million target.

And there is still scope to improve the online experience, the business said, with investment in its e-commerce capabilities already underway in Australia and New Zealand.

Nick Scali isn’t the only business that has profited from the consumer-led shift in shopping during the Covid-19 pandemic, with Temple & Webster seeing earnings jump 556 per cent earlier this week, and JB Hi-Fi’s half-year profit up 86 per cent.

However, looking ahead to the remainder of the year, the furniture business is struggling to predict what the second half could look like.

“The rate of sales revenue growth has been lower than sales orders due to the increased lead times caused by delays in raw materials to our suppliers and shipping issues which continue to be challenging,” the business said.

“These supply chain delays make it difficult to accurately predict sales revenue growth for the second half.”

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