Universal Store has recorded an $11.3 million lift in sales for the first 20 weeks of FY24, hitting a total of $88.4 million.
The 14.7% growth primarily reflected the added contribution from Universal’s Cheap Thrills Cycles (CTC) acquisition, which was completed on October 31, 2022. The Universal Store brand reported a circa 1% drop in sales.
The company's total retail channel sales were up 2.6% versus the prior corresponding period (PCP), while like-for-like (LFL) sales were down 6.4% for the same period. This reportedly improved to negative 4.4% during the seven trading weeks of October and November to date, with LFL sales across the first 13 weeks of FY24 being negative 7.4%.
Universal Store recorded a decline in spending across regional areas of eastern Australia, contrasting with stronger sales in metropolitan and CBD locations.
“In response, Universal Store has taken proactive steps to refine its product offerings in these markets, placing a heightened emphasis on catering to the preferences of price‐conscious customers,” the company confirmed to shareholders. “However, the company’s resolute commitment to promotional discounting discipline remains.”
Universal Store’s gross margins are currently in line with the PCP. The company’s year-to-date cost of doing business (CODB) is slightly lower than the PCP, as a percentage of sales.
Group earnings before interest and tax (EBIT) are approximately $2.1 million ahead of the PCP.
“I'm once again gratified by the exceptional response of our entire team as we navigate the current trading environment,” CEO Alice Barbery said.
“We have diligently executed a multitude of cost‐saving and efficiency‐improvement initiatives while maintaining a relentless focus on meeting the evolving needs of our customers. We remain committed and confident in our long‐term strategy."
In the same 20-week period, the CTC business recently moved into a new head office and distribution centre in Byron Bay.
The brand also launched new websites and developed a new design for Thrills stores. The group will open the first new‐format Thrills store in late December 2023 and will close a small number of existing legacy Thrills stores which the company believes are misaligned with the group’s long‐term plans.
In addition to opening two new Universal Store sites in the FY24 year-to-date (YTD) period, the company is selectively investing in re‐fitting and refurbishing some key sites and relocating and upsizing other stores.
The Perfect Stranger retail format will expand to have eleven stores by December 31, 2023, with plans for more new stores in the second half of FY24. The company is also building online execution capabilities in Perfect Stranger and have also added more product design capability into this brand to elevate the product and expand ranges.
The company expects to have 100 stores trading by December 31, 2023 and approximately 104‐107 stores by June 30, 2024.