The Beacon Lighting Group Ltd (ASX: BLX) share price is rallying after the company posted an increase in full-year sales and profits in its FY22 results.
The lighting retailer delivered record sales of $304.3 million, which is a 5.4% increase over the previous year.
What may be getting investors more excited is the 6.2% uplift in gross profit to $210.4 million. This is because it implies an expansion in gross margin at a time when companies are struggling with cost pressures.
Little wonder the Beacon Lighting share price is jumping 12.4% to $2.48 at the time of writing. Meanwhile, the S&P/ASX 200 Index (ASX: XAO) is largely flat.
Summary of Beacon Lighting's FY22 results
- Group sales increased 5.4% to a record high of $304.3 million
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) improved by 7.8% to $92.7 million
- Company store comparative sales increased by 0.3%. H1 FY22 comparative sales (impacted by lockdowns) declined by 7.1% and H2 FY22 comparative sales increased by 9%
- Trade sales increased by 22.3%, online trade sales increased by 67.6%
- Online sales increased by 31.3% to $34.1 million
- Beacon International USA sales increased by 51.9%
- Final dividend of 5 cents per share with 100% franking payable on 20 September.
Beacon Lighting share price glows as margins grow
The retailer credited its "exciting" range of products and outstanding customer service for its success.
It pointed out that its 492 new Australian designed and developed products are hitting the spot with its customers and supporting its profit margins.
That's no easy feat in this environment. Runaway inflation and supply chain bottlenecks are weighing on our broader economy at a time when growth is slowing. The COVID-19 lockdowns in Victoria and New South Wales also negatively impacted on sales.
But new store rollouts have helped. Retail chains that open new stores tends to benefit from greater economies of scale.
Outlook still looking bright
Beacon Lighting said it's encouraged by the sales for the start of the new year. It's also relaunched its trade club with an improved digital offering and is counting on trade customers to provide it with further growth in FY23.
It also continues to acquire new trade products in order to create a comprehensive range of products for trade customers.
The retailer is also counting on its ongoing expansion of Australian-designed products into overseas markets like the USA and China, as well as the Asian and European markets to boost growth.
Beacon Lighting share price snapshot
The Beacon Lighting share price gained 16% over the past year, before today's rally. In contrast, the All Ordinaries index slipped 5% over the same period.
Beacon Lighting isn't the only reporting season hero in the retail sector. Other retailers that have also delivered better-than-expected results include Super Retail Group Ltd (ASX: SUL) and Temple & Webster Group Ltd (ASX: TPW).
