Nick Scali (ASX: NCK) Lifts FY26 Profit 22% as UK Turnaround Accelerates

Nick Scali reported stronger FY26 earnings as wider margins and a reduced UK loss outweighed subdued furniture retail conditions.

Group net profit after tax reached $75.7 million, up 22.1% against FY25 underlying profit. Revenue increased 4.3% to $516.7 million.

On a statutory basis, profit rose 31.2% from $57.7 million. Group EBITDA increased 13.6% to $180.7 million, while EBIT advanced 18% to $124.7 million.

Margin Gains Drive Earnings

The group gross margin expanded 210 basis points to 65.6%. That helped profit grow considerably faster than revenue during the year.

Executive Chair and CEO Anthony Scali said: “FY26 was another strong year for Nick Scali, with group Net Profit After Tax increasing 22% and group revenue growing 4% despite a subdued retail environment.”

“The group delivered a 210 basis point improvement in gross margin, reflecting disciplined pricing, sourcing and inventory management.”

Australia and New Zealand remained the main earnings contributor. Revenue increased 5.1% to $476.7 million, while underlying net profit rose 10% to $80.5 million.

The regional gross margin improved 100 basis points to 66%. Written sales orders increased 2.7%, although the second half softened against a strong prior-year comparison.

Operating expenses rose $5 million against the FY25 underlying result. Nick Scali attributed most of that increase to employment and additional first-half marketing costs.

UK Business Reaches Second-Half Profit

The UK operation recorded a $4.8 million full-year loss, narrowing from an underlying loss of $11.2 million in FY25. Importantly, it generated a $0.8 million profit in the second half after losing $5.6 million in the first.

UK written sales orders increased 31.4% to $45 million. Like-for-like orders from established Nick Scali UK showrooms rose 19% during the second half.

Revenue declined $1.8 million to $40 million because refurbishment work required store closures. However, the UK gross margin climbed to 60.3% from 47.1%.

The second-half UK margin reached 61.2%, compared with 59.2% during the first half. This margin recovery and the return to second-half profitability are central to understanding the group result.

Dividend and Early FY27 Trading

Directors declared a fully franked final dividend of 39 cents per share. The payment takes the full-year dividend to 78 cents, up 30% from FY25.

The final dividend has an October 1 record date and will be paid on October 22.

Australia and New Zealand written sales orders were flat during FY27’s first five weeks. That comparison cycled high-single-digit growth in the prior period.

By contrast, UK written orders increased 35% over the same opening period. Nick Scali expects one new UK store to open in October.

Six Australian stores opened during FY26 or July 2026, with four more planned during FY27. The company expects those six recent openings to contribute positively to FY27 earnings.