Investors in furniture retailer Nick Scali Limited (ASX: NCK) had an extra reason to smile over the weekend.
Shares in this ASX 200 retail stock rocketed by 6.9% on Friday to close out the week at $20.49 apiece.
And in intraday trading, its share price reached all-time highs of $21.25.
For context, the All Ordinaries Index (ASX: XAO) ended Friday 0.27% lower.
The rally followed the release of the company's FY25 results and capped a stellar run so far this year.
All up, Nick Scali's share price has jumped from $14.81 at the start of January to $20.94 at the time of writing.
This marks a stellar 41% surge in just over seven months.
But is there any fuel left in the tank for this ASX 200 retail stock?
Let's find out what analysts at renowned investment bank Macquarie Group Ltd (ASX: MQG) have to say.
Operational snapshot
As a brief background, Nick Scali operates across two geographic regions: Its core Australia and New Zealand (ANZ) market and its emergent UK business.
In the ANZ region, the company operates 110 stores. It has also identified a long-term opportunity to potentially grow this number to between 180 and 200 outlets.
Separately, Nick Scali entered the UK market by acquiring Fabb Furniture in May last year.
It has since embarked on a refurbishment and rebranding program of 20 stores which is due for completion in the first half of FY26.
Here, the retailer expects to operate at a loss until refurbishment of the stores is concluded and sales pickup.
The ASX 200 retail stock is now looking to grow its marketing spend to boost sales and establish the Nick Scali brand in the UK.
In the longer term, the company is targeting up to 86 Nick Scali stores and as many as 100 Plush outlets in this market.
Macquarie's take on ASX 200 retail stock
Analysts at Macquarie appear upbeat about Nick Sali's performance in FY25 and its prospects for FY26.
The broker cited sales momentum in the ANZ region, gross margin expansion, and progress in the UK growth strategy as potential catalysts for FY26.
Furthermore, improved consumer demand stemming from a potential rate cut could act as a spark for the company's share price.
Macquarie noted that the ANZ region remains the core driver of value for Nick Scali's operations. It expects ANZ to account for 90% of revenue in FY26.
The broker believes that strength in this operating region should comfortably offset any marketing expense for growing the Nick Scali brand in the UK.
It also pointed to gross margin improvements in the UK as a sign that Nick Scali's expansion strategy is working.
The gross margin at the company's refurbished stores reached 58% in the second half of FY25, up from 42% when it first acquired Fabb Furniture.
As a result, Macquarie has placed an outperform rating on Nick Scali with a 12-month share price target of $21.90.
This implies about 5% upside potential from its share price at the time of writing.
