The ASX dividend stock Universal Store Holdings Ltd (ASX: UNI) has delivered reliable dividends to shareholders this decade. I think it could be a top investment for passive income in the coming years and it's enacting business plans to deliver it.
Universal Store owns a portfolio of premium youth fashion brands across retail and wholesale businesses. Its core businesses are Universal Store and Perfect Stranger. It also has CTC (which operates the THRILLS and Worship brands). The company has more than 120 stores across Australia.
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Compelling dividend record
The business started paying a dividend in FY21 and it has increased its payout every year since then, including in FY26.
In the recent 2026 financial year report, the Universal Store board of directors hiked its annual dividend per share by 11.7% to 43 cents. At the time of writing, Universal Store now has a dividend yield of 5.2% excluding franking credits and 7.4% including franking credits.
But, it's more than just the dividend that makes this business attractive.
Strong business growth
In FY26, overall sales grew 12.9% to $376.1 million, with Universal Store sales growing 11.5% (amid 8.1% like-for-like (LFL) sales growth). Perfect Stranger sales soared 40.8% to $35.9 million, with 13% LFL sales growth.
Operating leverage was clear in the FY26 result. The company achieved a 140 basis point increase in the gross profit margin to 62.5%, operating profit (EBIT) climbed 17.2% to $64 million, and underlying net profit grew 16.3% to $40.5 million.
Dividend growth is not guaranteed, of course, but Universal Store has delivered regular dividend growth, including during the high-inflation period three years ago and in FY26 amid the Middle East fallout.
The outlook looks good for further dividend growth because of the company's plans and the strong start to trading in FY27.
Management intends to open between 16 and 20 stores across the group in FY27, with nine to ten new Universal Stores, between six and eight Perfect Stranger stores and one or two new THRILLS stores.
It also plans to reopen a temporarily closed store, refurbish four or five stores and relocate three stores. The company said it continues to be prudent in ensuring the long-term profitability of new stores and lease renewals.
FY27 has started strongly with 9.1% overall direct-to-consumer sales growth.
Universal Store sales are up 5.5% (with 2.9% LFL sales growth), Perfect Stranger sales are up 45.8% (with 17.6% LFL sales growth) and CTC direct-to-consumer sales are up 10.1% (with 3.8% LFL sales growth).
Time will tell whether the business can continue this strong level of sales growth over the rest of FY27 amid the challenging retail conditions.
$1,000 investment in the ASX dividend stock
At the time of writing, if an investor invested $1,000 into Universal Store shares, they'd be able to buy 120 shares with a little bit of money left.
Based on the FY26 payout – but I expect growth in FY27 – an investor would receive $51.60 of cash and approximately $22.11 of franking credits.
It's not as cheap as it was earlier this year, but this ASX dividend stock continues to impress me, and I'd happily buy some shares today.
