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.
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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%.
