Speaking to investors at Nick Scali’s AGM on Thursday, managing director Anthony Scali said growth had varied in the first quarter, in line with commentary from August that the double-digit growth being cycled over the last two-years would slow.
Nick Scali’s FY17 net profit after tax was up 42.4 per cent to $37.2 million on same-store sales growth of 11.1 per cent.
“For five consecutive years we have produced double digit growth as our store network was expanded and the awareness of our brand strengthened,” said Scali.
Scali did say, however, that efforts to reduce costs and improve margins would deliver double-digit profit growth in the first half, even as a predicted downturn in the housing market begins to weigh in on business.
“As mentioned in our full year results announcement, we expect a lower growth environment for fiscal 18, which has been confirmed by recent trading,” Scali said.
Scali still plans to open between 8-10 stores in FY18, with two having already opened in August and October.
New Zealand, which has been identified as a growth opportunity for the company, is preparing to launch with a store opening slated in Auckland for December.
“Whilst recognising that it has different market dynamics, we are confident our brand will be successful in this, our first international market,” said Scali.
Investors appeared pleased with the trading update, with the furniture retailer’s shares up over 5 per cent to $6.62 at markets close.
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