The Dusk Group Ltd (ASX: DSK) share price is catching the eye of investors on Thursday.
In morning trade, the ASX retail stock was up as much as 26% to a 52-week high of $1.14.
This was driven by the release of the specialist retailer's full year results.
ASX retail stock rockets despite sales and profit declines
- Sales down 7.9% to $126.7 million
- Gross profit down 7.5% to $81.5 million
- Pro forma EBIT down 62% to $6.2 million
- Fully franked final dividend of 4 cents per share
What happened in FY 2024?
For the 12 months ended 30 June, Dusk reported a 7.9% decline in sales to $126.7 million. This reflects a 12.1% decline in like for like sales, which was offset slightly by new store openings.
Thanks to a modest improvement in the ASX retail stock's gross margin, its gross profits only fell 7.5% in FY 2024 to $81.5 million. This was despite continued headwinds from currency depreciation and higher freight costs. Management notes that this was driven by the realisation of supply chain efficiencies and tactical control of its promotional calendar.
However, this was ultimately offset by higher costs of doing business (CODB). Dusk revealed that its CODB increased by 5.4% due to rent increases and underlying store labour wage rates. Combined with higher depreciation, this led to the ASX retail stock's pro forma EBIT falling 62% to $6.2 million and its net profit after tax falling 57.3% to $5 million.
Unsurprisingly, the Dusk board elected to cut its dividend in FY 2024. It declared a fully franked final dividend of 4 cents per share, bringing its total dividends to 6.5 cents per share. This is down 41% from 11 cents per share in FY 2023.
Management commentary
The ASX retail stock's CEO and managing director, Vlad Yakubson, was pleased with the work done behind the scenes in FY 2024. He said:
FY24 has been a transformational year for dusk Group with an improved sales performance in the second half reflecting the implementation of several strategic initiatives focused on product rejuvenation, disciplined promotional activity and better online execution. There has also been significant talent renewal during the year with a new leadership team bringing experience and trade knowledge to multiple areas of the business.
Outlook
The reason the Dusk share price is rocketing today is likely to be the company's strong start to FY 2025.
Management advised that total sales are up 16% and like for like sales are up 12.1% during the first 8 weeks of FY 2025. This comprises online sales growth of 39.1% and store sales growth of 14.4%.
Yakubson commented:
dusk has had a good start to FY25 with the Allen's x dusk collaboration performing strongly as our product rejuvenation strategy takes shape. Our strategic priorities in FY25 are focused on the reassertion of our leadership in the home fragrance category which will be achieved by increasing customer frequency, driving new customer acquisition and redefining our brand identity.
