The Nick Scali Limited (ASX: NCK) share price is having a horror week on the ASX despite no news having been released by the company.
However, the furniture retailer did post its first-half earnings last Wednesday. Additionally, reports of bearish sentiment surrounding the retail sector have emerged as experts predict 2022 could see retail earnings dip.
At the time of writing, the Nick Scali share price is $12.88. That's 7.6% lower than its previous close and 12.8% lower than it ended Friday's session.
Let's take a look at all that could be weighing on the retailer's stock this week.
Image source: Getty Images
What might be weighing on the Nick Scali share price?
The Nick Scali share price is suffering after fund managers predicted the retail sector will slump this year. Additionally, household spending intentions (HSI) fell in January, likely due to the Omicron outbreak.
According to reporting by Livewire, Investors Mutual Limited senior portfolio manager Simon Conn and Elston Asset Management portfolio manager Bruce Williams agree the ASX retail sector is poised to suffer in 2022, driven by changing consumer behaviour.
Conn stated the loss of COVID-19 government stimulus and a return to 'normality' could see retail demand dropping. Meanwhile, Williams believes ASX-listed retailers might be "over-earning".
On top of such sentiments, the Commonwealth Bank of Australia (ASX: CBA) today announced HSI dropped 10% in January, with retail hit hardest.
Retail spending intentions fell a notable 20.9% last month after gaining during the months leading up to the holiday seaon. However, retail spending intentions remain 4.4% higher than they were in January 2021.
CBA economists believe last month's fall is largely due to the spread of the Omicron variant.
In positive news for retailers, CBA credit card data shows consumer spending improved early this month.
The latest from Nick Scali
The Nick Scali share price tumble could also be a delayed reaction to its half-year earnings.
The 6 months ended 31 December were a mixed bag for Nick Scali. The company's revenue grew 5.4% to $180 million while its net profit after tax dropped 6.6% to $35 million.
Looking forward, the company is optimistic it's suffered through the worst COVID-19 impacts. However, it's still being affected by shipping delays.
It expects its revenue will continue to grow in the second half of financial year 2022.
