Furniture retailer Nick Scali Limited (ASX: NCK) says it expects to see a net profit after tax for the first half of the 2017 financial year (FY17) to be in a range of a 30% to 35% increase over the previous year.

That’s an astonishing jump, considering the company reported a 53% increase in net profit for the 2016 full financial year, strong competition, weak consumer confidence, and a low Australian dollar.

For the same period last year, Nick Scali reported a 40.7% increase in net profit to $14.1 million. For the first half of FY17, that suggests a minimum net profit of $18.3 million.

However, existing long-term shareholders are unlikely to be surprised. The upmarket furniture retailer has been consistent over the past five years – one reason why the share price is up 252% since November 2011.

At the current price of around $5.65, Nick Scali is trading on a trailing P/E of ~18x and paying a fully franked dividend of over 4.0%. Given the forecast increase in net profit, that appears a cheap price to pay for a high quality retailer. And when I say high quality, one factor I consider is how the company has managed to slash its cost of doing business each year over the past five years.

Nick Scali CODB chart

Source: Company presentation

Comparing Nick Scali to other retails, Beacon Lighting Group Ltd (ASX: BLX) is trading on a trailing P/E of 17.0x, with a dividend yield of 3.3%, Fantastic Holdings Limited (ASX: FAN) is on a P/E of 31.4x – although the company has received a takeover offer, and Harvey Norman Holdings Ltd (ASX: HVN) is trading on a P/E of 14.5x – but offering much lower growth than Nick Scali.

Even at today’s share price of $6.36 after a rise of 11.6%, Nick Scali could well be one retailer to add to your watchlist.

We've just released our #1 dividend pick for 2017. And the winner is...

With its shares up 155% in just the last five years, this 'under the radar' consumer favourite is both a hot growth stock AND our expert's #1 dividend pick for 2017. Now we're pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is click the link below!

Simply click here to receive your copy of our brand-new FREE report, "The Motley Fool's Top Dividend Stock for 2017."

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.