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

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »