Universal Store (UNI) H1 2025 earnings summary

Executive summary

• Group sales rose 16.1% to $183.5 million, with underlying EBIT up 14.9% to $35.4 million, driven by sales growth, gross margin expansion, and cost control.

• Gross margin increased 90 basis points to 60.6% despite industry-wide discounting.

• Online sales grew 12.6% to $25.2 million, representing 13.7% of total sales.

• Net cash position at period end was $37.7 million with no borrowings; cash-to-EBITDA conversion at 125%.

• $13.6 million non-cash impairment of CTC goodwill recognized, impacting statutory NPAT.

Financial highlights

• Underlying NPAT up 16% to $23.2 million; statutory NPAT at $11.3 million due to CTC impairment.

• Underlying EPS was $0.303, up from $0.263; basic EPS was 14.8 cents, down from 27.2 cents.

• Cost of doing business increased 170 basis points to 30.9% due to wage inflation, team investment, and higher bonus accruals.

• Operating cash flow increased to $59.9 million from $48.1 million year-over-year.

• Group 5-year sales CAGR of 13.9% from FY20 to 1H FY25.

Outlook and guidance

• Early H2 FY25 trading: group DTC sales up 31.8%, with Universal Store up 27.6%, Perfect Stranger up 90.1%, and CTC up 40.1%.

• New store rollout on track for 9–15 new stores in FY25, with 7 opened in H1 and 5 more confirmed for H2.

• Management expects wholesale to remain challenging for CTC in H2 FY25; currency risk being actively managed.

• Continued investment in new stores, with a long-term target of 100+ Universal Stores and 60+ Perfect Stranger stores.

• Focus on disciplined pricing, inventory management, and operational efficiency amid macroeconomic challenges.