Best & Less share price surges 7% on sharp FY22 results

Investors are buying up the clothing retailer's shares amid some positive FY22 metrics.

| More on:
Happy shopper at a clothes shop.

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

  • The Best & Less share price is trading higher amid the company announcing its FY22 results
  • Investors have begun to nibble at the company's current prices, driving shares 7% higher after market open
  • Best & Less shares remain almost 33% lower this year to date

The Best & Less Group Holdings Ltd (ASX: BST) share price is well in the green this morning following the release of the company's FY22 results.

At the time of writing, the clothing retailer's shares are trading 4.96% higher at $2.75 apiece after hitting a high of $2.81 a share shortly after market open.

Let's check the company's results.

Best & Lest shares lift as online sales grow

Key takeouts from the company's earnings include:

  • Revenue of $622 million, down 6.2% from $663 million
  • Like-for-like (LFL) sales, also known as same-store sales, were down by 0.7% year on year, but up 9.1% versus FY20
  • Online sales growth of 15.6% versus this time last year to $69.7 million
  • Gross profit margin of 49.1%, stemming an EBITDA margin of 10%
  • Pro forma EBITDA of $62.5 million compared to $71.6 million in FY21
  • Net cash position of $36 million
  • Final dividend of 12 cents per share declare, fully franked dividend yield of 8.8% based on 29 August closing price
  • Total dividend of 23 cents per share for FY22

What else happened this period for Best & Less?

Despite numerous challenges affecting supply chains and overall product supply, notwithstanding COVID-19 headwinds, the company grew its gross margin 20 basis points year on year.

Online sales were the standout with around a 16% year-on-year gain that also contributed around 11% of total sales, up from 9.2% the year prior.

Growth also benefited from a strong performance from the company's core non-discretionary product lines. These continue to drive significant volume for the business, Best & Less said.

Meanwhile, a 12 cents per share dividend was declared on a roughly 80% payout ratio. This brings the total dividend to 23 cents per share for FY22.

Management commentary

Speaking on the results, Best & Less chief executive officer Rodney Orrock said:

After losing over 21% of total trading days in the first half due to COVID-related store closures, I am pleased to report a strong second half performance. Our team kept their eyes on the ball, doing a great job to control the things that could be controlled, delivering significantly higher sales and strong margins, while continuing to provide superb service to our customers.

What's next for Best & Less?

The company has started FY23 well. It said:

Through eight weeks of trading in H1 FY23, total sales were +38.0% on the [prior corresponding period] PCP. LFL sales were +1.4% overall, with store LFL sales +7.5% and online sales -29.1%, noting that sales in the PCP were impacted by lockdowns and trading restrictions in several states.

Best & Less share price snapshot

The Best & Less share price is down almost 33% this year to date but only 2.5% lower than this time last year.

The company's share price has climbed 17% in just the last month.

Best & Less has a current market capitalisation of around $346 million.

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.

More on Earnings Results

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 »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Earnings Results

Graincorp share price lifts off as dividend is maintained and debts plunge

ASX 200 investors are bidding up the Graincorp share price today. But why?

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Earnings Results

Why is this ASX 200 stock avoiding the market selloff and pushing higher?

Not all shares are falling with the market on Thursday.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

CBA share price on watch following $2.4b third quarter profit

CBA delivered another bumper profit for the three months.

Read more »