The Dusk Group Ltd (ASX: DSK) share price is going to be on watch after a very strong trading update.
Dusk is a retailer of home fragrance products. It has both a physical store network and an online store.
How good was Dusk’s trading update?
The fragrance retailer reported that trading remained strong in the third quarter of FY21.
In the third quarter, it saw 50.5% growth of sales to $27.7 million, with underlying EBIT (EBIT explained) rising by $5.8 million to $4.9 million (up from a loss of $0.9 million).
That brings the total underlying EBIT generated in the nine months to 31 March 2021 to $33.2 million, up 281%.
The company has seen “excellent” like for like sales growth, as well as a large increase in the gross profit margin, whilst keeping on top of costs.
In the final quarter of FY21, it will be comparing against volatile trading in FY20 where stores were shut, but then it had strong sales in the last couple of months.
Dusk said it is pleased with how April trading is going. For FY21, Dusk is expecting sales to be between $147 million to $151 million with underlying EBIT to be between $38 million to $48 million.
That means FY21 EBIT is expected to grow by 219% to 236%. This is very strong growth. But who knows how long the strong retail environment is going to last? It could be one to watch though at the current Dusk share price.
