ASX consumer discretionary stock Universal Store Holdings Ltd (ASX: UNI) just soared 17% on the back of earnings results.
Investors were gobbling up shares in the company following a result that included double-digit revenue growth and ongoing store expansion.
A new report from Bell Potter suggests this could be a sign of what's to come over the next 12 months.
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What did the company report?
As reported by Laura Stewart yesterday, the company reported a 12.9% rise in revenue to $376.1 million for FY26, with underlying NPAT up 16.3% to $40.5 million.
Other results included:
- Underlying net profit after tax (NPAT) of $40.5 million, up 16.3%
- Statutory NPAT of $18.2 million, down 21.6% due to non-cash impairments
- Gross margin of 62.5%, up 1.4 percentage points
- Underlying EBIT of $64.0 million, up 17.2%
- Final fully franked dividend of 17 cents per share (FY total dividends: 43.0 cps).
Prior to yesterday, this ASX consumer discretionary stock had faced several sector-related headwinds.
However, it seems the tide could be turning.
Bell Potter renewed confidence
Following the release, Bell Potter provided updated guidance on this ASX consumer discretionary stock.
The broker saw the FY26 result as a clear beat, with revenue above guidance and EBIT at the top end, while FY27 trading has started positively despite tough comparables.
Group retail sales were up 9%, with particularly strong like-for-like growth.
The biggest positive was the FY27 store-opening guidance of 16-20 stores, well above Bell Potter's prior estimate.
They have lifted their forecast to 17 net new stores, putting the core Universal Store network on track to reach around 100 stores by FY28.
Upgraded target price for this ASX consumer discretionary stock
Based on this guidance, Bell Potter retained its buy recommendation.
It also lifted its price target to $9.70 (previously $9.30).
From yesterday's closing price, this indicates a further 17% upside.
Our TP increases by ~4% to $9.70/share given our modest earnings revisions and time creep. We remain supportive of UNI's continued ability to gain market share in a niche streetwear/womenswear category as the overall retail sector goes through a cyclical low point in FY27. We see this backed by UNI's continued execution to attract the selective youth customer spend.
At 15x FY27e P/E and continuing to offer ~9% EBIT growth over FY27-29e (BPe), we retain our optimistic views on UNI as a high quality retailer with a healthy balance sheet and maintain our BUY rating.
