The Universal Store Holdings Ltd (ASX: UNI) share price is charging higher on Thursday.
In morning trade the fashion retailer’s shares are up 6.5% to a record high of $6.50.
This means the Universal Store share price is now up 71% from its November IPO price of $3.80
Why is the Universal Store share price charging higher?
Investors have been buying Universal Store shares following the release of its half year results this morning.
For the six months ended 31 December, the company reported an impressive 23.3% increase in sales to $118 million. This was driven by like for like store sales growth of 19.1% and a 128.3% jump in online sales. This offset store closures in Melbourne between August and October.
Positively, the company reported an increase in both its gross and operating margins. This underpinned a 63.6% increase in underlying net profit after tax to $21.1 million. In light of this strong performance, the Universal Store Board has declared a fully franked interim dividend of 5 cents per share.
The company received support from the JobKeeper program during the half and recorded a net benefit of $3 million. However, it has decided to repay these funds in the second half.
Universal Store has started the second half very strongly. It has achieved sales growth of 23.5% during the first seven weeks of the half. This is being driven by like for like sales growth of 28.2%, which offset store closures during recent lockdowns.
Positively, its gross margin has firmed and remains in line with the first half run rate.
Looking ahead, management notes that it will soon be cycling a period of store closures in April and May. This should bode well for sales growth in these periods.
In addition, it is “encouraged by the prospects for new occasions and other triggers for shopping and wardrobe renewal that will occur for our customers as “post Covid-19 normal” continues to emerge.”
However, due to the ongoing uncertainty relating to COVID-19, the company is not providing guidance for FY 2021 at this time.