Furniture retailer Nick Scali Limited (ASX: NCK) appears unscathed by recent falls in consumer confidence. The company says it expects to report a 10% increase in revenues over the previous year.
Net profit after tax is expected to be around $14 million, an increase of ~15% on the 2013 financial year's $12.2 million. The company did not mention any sign of tough conditions, slowing sales or anything else that could be detrimental to its financial performance. Indeed, same store sales (which excludes newly-opened stores) is expect to grow by 5% over the previous year.
That's an impressive performance, given the woes experienced by other retailers. Super Retail Group Ltd (ASX: SUL), Kathmandu Holdings Ltd (ASX: KMD), Reject Shop Ltd (ASX: TRS) and Pacific Brands Limited (ASX: PBG) have all reporting slow sales thanks to a crash in consumer confidence, and abnormally warm weather in recent months.
No wonder Nick Scali shares have surged 7% higher today to $2.70 in late afternoon trade.
But long-term shareholders probably won't be surprised. Nick Scali has delivered wonderful returns to investors over the past decade. Over the past five years the company's performance is even more impressive, with an average annual shareholder return of 34%.
There's no reason to think the good times can't continue to keep rolling on. The Australian dollar has held up strongly, supporting the import of high quality furniture, and doesn't appear to going lower anytime soon.
As a niche upper-market furniture retailer, most of Nick Scali's customers are unlikely to worry too much about consumer confidence levels, and are still willing to put their hands in the pockets when they want new furniture.
With a trailing dividend yield of 4.9%, fully franked, Nick Scali could be a perfect retailer to add to your portfolio.
