Dusk (ASX:DSK) share price slumps as revenues plunge 12%

Dusk’s candle is flickering after this earnings report…

| More on:
A smouldering white candle with a burgundy background indicating the falling Dusk share price today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • ASX homewares retailer Dusk has reported its half-year earnings this morning
  • Revenues slumped 12% over the half, with earnings also falling
  • However, the company continues to see strong growth in its online division

The Dusk Group Ltd (ASX: DSK) share price is falling this Thursday morning after the ASX homewares retailer reported its half-year earnings for the six months to 31 December 2021. Dusk shares opened at $2.59 apiece today but have plunged 4.63% at the time of writing to $2.47 a share. 

Dusk share price falls on lacklustre first half update

  • Revenue from sales fell 12% over the half to $80 million. That was below the $90.9 million reported for the same half last year (1H20). But still above the $58.6 million recorded for 1H19 
  • Pro forma earnings before interest and tax (EBIT) of $21.3 million. Tahat’s down from 1H21’s $28 million.
  • Pro forma gross margin of 68%, a rise from last year’s 67.7% 
  • Dusk’s online sales rose 2.8%, making up $7.7 million, or 9.7% of total sales 
  • Store count up by 6 to 128 stores 
  • Net cash of $33.3 million 
  • Shareholders to receive an interim dividend of 10 cents per share, fully franked. That is flat on last year’s final dividend, but a 33% fall from the previous interim dividend of 15 cents per share 

What else happened in the first half?

Dusk stated that sales over the half were “adversely impacted” by the government-mandated lockdowns (and subsequent store closures) over the half across New South Wales, Victoria and the ACT. These shutdowns resulted in a loss of 4% of the half’s trading days.

On a positive note, Dusk reported that Dusk Rewards active members grew from 630,000 to 718,000 over the half, with Dusk Rewards members now accounting for 62% of sales, up from 59%.

This was the half where Dusk acquired candle company Eroma for $28 million. This acquisition was announced in mid-December. It saw the Dusk share price shoot meaningfully higher at the time. 

 What did management say?

Here’s some of what Dusk CEO Peter King had to say on these results:

Given the circumstances faced during the half, there is much to be pleased about in the overall result delivered, especially having regard to the fact we cycled exceptional LFL sales growth from the prior corresponding period. 

We remain focused on our customer and strategic priorities, and have made tangible progress on our growth strategies, including continued store roll out in Australia, preparing to commence operations in New Zealand, and the acquisition of Eroma.

What’s next?

Dusk also gave a trading update for the first eight weeks of the second half of FY2022. The company stated that “consumer sentiment continued to be soft and shopping centre foot traffic was sharply down” over this time. However, “our sales conversion rates and ATV remain up vs pcp”. 

For those eight weeks, total sales remain down 11.8% over the same period last year. In saying that, Dusk’s online sales are a pleasingly 19.4% above where they were last year. 

The company says that supply and distribution disruptions remain and that freight costs remain “elevated”, but inventory is healthy and the company is on track to open four new stores by Monther’s Day. 

Dusk share price snapshot

The Dusk share price has had a tough start to 2022 and remains down 22.2% year to date. The company is also down more than 14% over the past year, but up close to 45% since its IPO back in November 2020. 

At the current Dusk share price, this ASX retailer has a market capitalisation of $153.8 million, with a dividend yield of 8.1%. 

Motley Fool contributor Sebastian Bowen owns Dusk Group Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dusk Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

A Chinese investor sits in front of his laptop looking pensive and concerned about pandemic lockdowns which may impact ASX 200 iron ore share prices
Earnings Results

Why did this $1.1 billion ASX 300 share just sink 9%?

This high-profile REIT looks to be coming under pressure amid a more challenging outlook for FY23.

Read more »

a man sitting at a computer at a desk has a look of anguish and trepidation on his face as he opens his eyes wide and made an aargh type expression with his mouth as his hair stands on end and his tie also stands on end with one part over each shoulder in what is supposed to be a humorous picture of something in a panic.
Earnings Results

Credit Corp share price drops 15% as core debt buying market flounders

The debt-focused finance company reported a 9% increase in net profits after tax for the full financial year.

Read more »

A discussion between colleagues using a laptop.
Investing Strategies

5 things to do during ASX results season

August and February can be hazardous for unseasoned investors. Here's a survival guide.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Earnings Results

Aussie Broadband share price plunges 15% as quarterly results fail to impress

The acquisition of Over the Wire added 16,000 business, enterprise, government and wholesale customers.

Read more »

Happy couple doing online shopping.
Earnings Results

Amazon share price surges 13% after hours on revenue beat

Amazon shares have caught a bid in post-market trading in the US.

Read more »

A piggy bank blasts off into the sky.
Earnings Results

Move over big four! This ASX non-bank lender just had a record quarter, and its share price is soaring 12%

Prospa is prospering today.

Read more »

man grimaces next to falling stock graph
Earnings Results

Did this really just cause the Dubber share price to tumble 25%?

Unpredictability in cash receipts could be weighing on Dubber shares today.

Read more »

Man and woman dance back to back in kitchen.
Earnings Results

Guess which beaten down ASX share is surging 20% today

Marley Spoon posts earnings.

Read more »