Furniture retailer Nick Scali has seen net profit tumble 15 per cent over the half year to 31 December 2019 to $21.6 million due to a difficult first quarter that was only somewhat remedied over a slower holiday period.
Sales fell 2.5 per cent to $137.5 million, down from $141.1 million, while expenses rose from 36.1 per cent to 40.2 per cent.
The business had expected to see net profit in the range of $17 to $19 million, however a stronger than expected second quarter led to a better than forecasted result.
“During the second quarter we achieved 3.5 per cent like-for-like written orders growth, which was a vast improvement compared to the first quarter,” Nick Scali managing director Anthony Scali said.
Earnings before interest and tax also fell to $28.8 million, a 19.6 per cent drop on the prior corresponding period’s $35.8 million.
During the half the business opened its third location in New Zealand and expects to open three more in the second half of the year.
Despite the increase in written orders for the second half, the business remains concerned about the current even of consumer confidence, which has been exacerbated by the coronavirus outbreak, bushfires, and other factors.
“Consequently it is very difficult to provide guidance as to the profitability for the full year to June 2020,” the business wrote in a note to investors.