The market may be charging higher on Friday, but not all shares are rising with it today.
In fact, one small cap ASX stock is on course to end the week deep in the red after crashing at the open.
Which small cap ASX stock?
The stock in question is Dusk Group Ltd (ASX: DSK). At the time of writing, the specialist home fragrance retailer's shares are down a massive 22% to 91 cents.
Investors have been hitting the sell button this morning after the small cap ASX stock released an update on what it expects to report for FY 2025.
The company notes that it continues to implement its product-led turnaround strategy, achieving ongoing sales and EBIT growth year-on-year. This is being driven by new customer acquisition and its expansion into new product categories.
Management also highlights that the recent Mother's Day week underlined Dusk's importance as a gifting destination, delivering year-on-year growth.
FY 2025 guidance
According to the release, total sales are expected to finalise at approximately $137 million to $139 million. This will be an increase of 8.1% to 9.7% on FY 2024's sales of $126.7 million. This marks a slowdown on the 12.3% growth it recorded in the first half.
Heading in the wrong direction is Duck's gross profit margin, which is expected to be 50 to 100 basis points lower on FY 2024's 64.3%.
This is expected to lead to underlying EBIT in the range of $7 million to $8 million. This will be up between 12.9% and 29% year on year.
Finally, net inventory is expected to be $15 million to $17 million (FY24: $15.5 million) and net cash is forecast to be $18 million to $20 million (FY24: $20.8 million).
While this result looks decent on paper, it appears to have fallen short of what the market was expecting from the retailer for FY 2025.
Management commentary
Commenting on the year, the small cap ASX stock's CEO and managing director, Vlad Yakubson, said:
FY25 is an important year for dusk as we continue to transform the business. We are excited by the improvements we are planning for FY26, as we deliver refreshed core product ranges, exciting seasonal and fashion product and further category expansion. We are in a strong financial position and our inventory remains clean and well balanced.
Following today's heavy decline, the Dusk share price is down by approximately 25% since the start of the year. Though, it remains up over 20% on a 12-month basis.
