Universal Store share price slides lower as earnings tighten in FY22

Despite COVID-19 headwinds, the company came in with a fairly steady earnings result.

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Key points

  • Universal Store posted its FY22 earnings today
  • Despite a challenging year due to residual effects of COVID-19, results were mixed for the company
  • The company did not provide specific FY23 earnings guidance today

The Universal Store Holdings Ltd (ASX: UNI) share price slid into the red today following the release of the company's FY22 results.

At the close on Friday, Universal Holdings shares were down 2.9% for the day, swapping hands at $5 apiece.

Universal Store revenue, profit down in FY22

Key standouts from the company's earnings results include:

  • Total Sales of $208.0 million, down 1.4% from last year's result
  • Online sales totalling $35.7 million, up 38% year on year and a margin of 17%
  • Gross profit down 2.1% to $121.3 million, reflecting a margin of 58.3%
  • Underlying earnings before interest and tax (EBIT) of $30.9 million, down 29% year on year
  • Statutory net profit after tax (NPAT) of $20.6 million, down 15% year on year
  • Underlying earnings per share (EPS) of 28.9 cents
  • Final dividend of 10.5 cents per share, bringing total FY22 dividend to 21.5 cents per share

What else happened for Universal?

Despite COVID-19 headwinds, the company came in with a fairly steady result, with total sales declining 1.4% to $208 million.

However, most of the downside was experienced in H1 of FY22, with an overall sales growth of 7.4% in H2 FY22.

Meanwhile, online sales saw double-digit growth of 28.5%, eventually contributing a total of around 17% to total sales.

Despite this, statutory and underlying NPAT each decreased year on year by 15% and 30%, respectively.

Universal also declared a final dividend of 10.5 cents per share, fully franked, bringing the total FY22 dividend to 21.5 cents.

Management commentary

Speaking on the results, Universal Store CEO Alice Barbery said:

Despite lingering COVID-19 challenges during the year, I'm proud of how our team has responded,
culminating in a pleasing FY22 result.

FY22 was a tale of two halves with H1 impacted heavily by mandated store closures and evolving variants of COVID-19, including a challenging Christmas and new year period with the emergence of Omicron. Conditions in H2 progressively recovered with sales and foot traffic improving month on month as restrictions eased and social events and gatherings re-emerged.

Barbery said Universal Store continued "to evolve into a larger, more sophisticated, and more robust business following successful implementation of various key strategic initiatives and investments".

What's next for Universal Store?

The company says that FY23 has already started strong, with total sales already up 54% on this time last year to $12.5 million.

It also says that fewer lost store days would be of benefit to earnings in FY23. Moreover, B&M Store sales growth reached 70% on this time last year, and it expects to open five new stores in H1 FY23.

It did not provide specific earnings guidance.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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