Analysts at investment bank UBS are confident in Universal Store Holdings’ (ASX:UNI) revenue outlook, according to its latest note to investors.
This comes after Universal Store – which also manages Perfect Stranger and Thrills – reported strong sales growth through FY26 across the board, with total sales up 12.9 per cent.
The group also shared an early FY27 update, confirming DTC sales at Universal Store up 5.5 per cent, Perfect Stranger up 45.8 per cent and Thrills up 10.1 per cent (excluding wholesale).
UBS told investors that the group’s like-for-like sales in early FY27 were pleasing, with Universal Store reporting LFL sales growth of 2.9 per cent in the first seven weeks of FY27, cycling 10.7 per cent growth in the prior year, with Perfect Stranger LFL sales lifting 17.6 per cent, cycling 19.3 per cent. Thrills reported a 3.8 per cent lift in LFL sales, cycling a 4 per cent lift in early FY26.
Despite UBS cutting its FY27 estimates on underlying earnings per share – driven by higher cost of doing business, depreciation and amortisation and net interest experience – the investment bank has retained its buy rating, citing confidence in revenue and gross margin outlook, driven by market share gains from strong execution and leveraging the more resilient youth consumer.
UBS is precting a 12-month target price of $9.25, lifting from $9.00 prior to Universal Store's FY26 trading update. Currently UNI's share price sits at $8.63 (11:11am, 25/08).
“We remain confident in the UNI revenue outlook due to merchants that judiciously adapt product ranges, persistently strong in-store execution & brand specific marketing teams, which drives customer engagement, conversion & basket size expansion,” UBS shared in a note to investors.
“These drivers support sustained market share gains in the fragmented youth apparel market, a cohort 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).”
UBS also pointed to an increased pace of store rollout that could further support top-line strength, “driven by increased landlord engagement & key competitors exiting core locations.”
In its trading update last week, Universal Store reported aspirations in store growth ahead. Five new Univeral Store locations were opened in FY26, bringing the retailer’s total store count to 88 as of June 30. The group wants to hit over 100 stores in the long term.
The Perfect Stranger national rollout continues, with seven new stores opened and one store relocated during the year. As at June 30, 2026, the brand has 26 stores, excluding the webstore, with an aspiration of a 60-store network.
Thrills, meanwhile, opened one new store, bringing its store count to nine by FY26 end. Universal Store’s Thrills subsidiary has been struggling on the wholesale side, with its total sales being dragged by an 18.9 per cent fall in wholesale sales, driven by reduced exports to the United States and fewer key retail accounts.
These struggles led Universal Store to issue a $22.3 million impairment of Thrills’ operations and the Thrills brand name.
Despite this, the brand’s retail strategy is progressing with in-store like-for-like sales growth of 17.8 per cent for the year.
At the bottom end, Universal Store’s underlying earnings before interest and tax (EBIT) grew by 17.2 per cent in FY26, hitting $64 million. UBS noted this was 2 per cent above consensus, but in line with its estimates.
The group’s underlying margins expanded by 60 basis points, which UBS noted was 140 basis point growth due to price and inventory management, offset by a circa 74 basis point lift in CODB/Sales due to cost inflation, systems and team capability investments.
UBS projects gross margin expansion due to less wholesale in Thrills and more Perfect Stranger sales, with AUD/USD tailwind largely offset by higher freight costs, while CODB/Sales is forecast to rise due to higher wages and team investment.
It is unclear if Alice Barbery’s exit from the group CEO role, with George Do taking over group leadership, could offset the projected team investment costs.