There are some ASX dividend shares that pay a large dividend yield and others that have a record of very regular dividend growth. It's rare to find options that can provide both an attractive dividend yield and consistent growth. Universal Store Holdings Ltd (ASX: UNI) is delivering an impressive level of both.
The ASX dividend share's main businesses are Universal Store, Perfect Stranger and CTC (trading as the THRILLS and Worship brands). Its strategy is to grow and develop its premium fashion apparel brands and retail formats, targeting fashion-focused customers.
The business recently reported its FY26 half-year result, which included a number of positive numbers that make me believe its dividend growth is on track for a very good future after already rising each year since 2021.
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Recap of strong earnings
In the first six months of FY26, it reported group sales growth of 14.2% to $209.6 million, including Universal Store sales growth of 11.9% to $174.8 million, Perfect Stranger sales growth of 41.5% to $17.8 million and CTC sales grew by 4.8% to $23.2 million.
The gross profit margin improved by 150 basis points to 62.1% and underlying net profit after tax (NPAT) increased by 22% to $28.3 million.
It was able to grow the gross profit thanks to "strong private band and third-party assortments, category mix and disciplined price management." Management said that inventory "continues to be well-managed, supporting disciplined pricing".
The broker UBS recently explained why the ASX dividend share's outlook seems positive regarding the business:
Retain Buy rating given confidence in the revenue & gross margin outlook, driven by market share gains from strong execution, and leveraging the generally more resilient youth consumer.
We remain confident in the UNI revenue outlook due to merchants that judiciously adapt product ranges & persistently strong in-store execution, which drives customer conversion & basket size expansion. These drivers support sustained market share gains in the fragmented youth apparel market. A secondary tailwind is the youth consumer where, based on UBS Research, spending intentions are stronger than the all-age consumer and apparel & footwear categories are of greater importance (remain strong & above the all-age consumer).
Large dividend yield expected from the ASX dividend share
The broker UBS is forecasting that the business can grow its annual payout each year between now and FY30.
In the 2029 financial year, the company is forecast by UBS to pay an annual dividend per share of 58 cents in FY29. That means it could, at the time of writing, provide a grossed-up dividend yield of 9.3% for FY29. That's a great yield and it could continue growing in the coming years.
