The Universal Store Holdings Ltd (ASX: UNI) share price has jumped 6% after a strong FY24 update.
Universal Store owns a number of ‘premium’ youth fashion brands, including Universal Store, CTC (THRILLS and Worship) and Perfect Stranger.
Universal Store FY24 update
The company said it had a strong trading performance as it exits FY24, with momentum continuing into July 2024.
Universal Store said total sales are expected to be $288.5 million, up 9.7% compared to FY23.
Universal Store brand like-for-like (LFL) sales growth was -0.3% in FY24, though it was positive 6.6% growth in the second half.
Perfect Stranger LFL sales growth was 7.3% in FY24, with 11.5% growth in the FY24 second half.
CTC retail and online LFL sales growth was 4.6% in FY24, with 5.6% growth in the second half. CTC wholesale sales growth was 5.4% in FY24.
The business finished with 102 physical store locations as at 30 June 2024, with 80 Universal Store locations, 14 Perfect Stranger locations and eight THRILLS stores.
Management said the strength of its sales in the second half, particularly in the fourth quarter of FY24, was “pleasing” and “driven by enhanced execution rather than favourable macroeconomic factors, which continue to pose challenges.”
Universal Store said that it has delivered successive quarter on quarter improvements in sales growth as the financial year progressed, with the FY24 fourth quarter being the strongest in terms on year over year growth in percentage terms.
Profitability
The business revealed it’s expecting to report FY24 underlying EBIT (EBIT explained) of between $46 million to $47 million, up from $40.4 million in FY23. That implies growth of at least 13.8% for the financial year that has just finished.
Management commentary
Universal Store CEO Alice Barbery said:
We’re really pleased to have delivered significant growth in underlying EBIT versus last year, amidst a backdrop of a ‘cost of living crisis’, inflationary pressures and evolving market dynamics. Our team have showcased our resilience and strategic acumen in navigating fluctuating market conditions. These results underscore our commitment to customer led outcomes and operational excellence. We’ve maintained a steadfast focus on managing margins, optimising inventory and controlling costs.
Outlook for the Universal Store share price
In the first two weeks of FY25, the company has seen positive sales trends continue. Total sales growth in the first part of FY25 being over 15% year over year, excluding the CTC wholesale channel.
I think Universal Store shares are very promising, with the business continuing to perform. Perfect Stranger is delivering very strong sales growth and could be one to watch in the years ahead. It’s one of the ASX dividend shares I’d keep my eyes on.
