Universal Store (UNI) H2 2024 earnings summary

Executive summary

• Achieved group sales of $288.5m, up 9.7% year-over-year, with underlying EBIT up 16.6% to $47.1m and underlying NPAT up 18.0% to $30.2m, driven by gross margin expansion and cost control.

• Strong H2 sales momentum, with Universal Store (US) LFL sales rebounding to +6.6% in H2 from -5.4% in H1; Perfect Stranger (PS) LFL sales up 7.3% for the year, with H2 at +11.5%.

• Online sales grew 10.3% to $40.9m, representing 14.2% of total sales.

• Net cash position improved to $14.3m at year end; total FY24 dividends of 35.5 cps, up 61.4%.

Financial highlights

• Group gross margin expanded 110bps to 60.1%, supported by private brand growth and CTC brand integration.

• Underlying EBIT margin improved 90bps to 16.3%; underlying EPS up 14.1% to 39.6 cents.

• Operating cashflow after capex was $60.0m, up $13.4m from FY23; capex reduced by $2.1m.

• Inventory increased by $3.9m to $29.9m, supporting new stores and trading.

Outlook and guidance

• Early FY25 trading strong: US sales up 15.3% (LFL +12.5%), PS sales up 89.9% (LFL +24.2%), CTC DTC sales up 13.3% (LFL +22.4%) in first seven weeks.

• Plans for 4-6 new US stores, 4-6 new PS stores, and 1-3 new THRILLS stores in FY25.

• Focus on further gross margin improvement, direct sourcing, and cost optimization.