Universal Store Holdings has reported an 18.5% drop in online sales in the first 21 weeks of FY23 as it cycles a 65.5% growth spike seen in the same period last year.
The company cited COVID-related closures of brick-and-mortar stores over the prior corresponding period (PCP) for the drop in sales.
Speaking at the company’s 2022 AGM, Chairman Peter Birtles said the loss of trading days over FY22 was mitigated “to some extent” by a strong growth in online sales, with 38.6% growth in FY21 and a 162.5% growth in FY20.
For FY22, Universal Store Holding’s online sales of $35.7 million (or 17.2% of total sales).
The company said it will continue to invest in online initiatives in FY23, along with driving product optimisation and expanding its store network.
In the first 21 weeks of FY23, Universal Store Holdings reported that its total Group sales were up 40.2% (26.4 million) versus PCP, which excludes stats from its recent acquisition of Thrills - completed October 31, 2022.
It has noted that early indicators suggest Thrills is on track to meet or exceed the internal investment case for FY23.
The company’s brick-and-mortar (B&M) sales grew by 56.8% in the same period, with its like-for-like (LFL) sales growing by 3.5%. The Group said its FY23 and store comparative LFL sales excludes closed stores from day of closure and new stores until they have cycled the first three weeks of opening.
Universal Store Holdings also reported that its YTD gross margins have improved vs PCP. During the same period last year, the Ccompany said it cleared winter stock more aggressively than in prior years.
The company has also launched a new warehouse management system in Q1 FY23 and relocated the store support office and DC into a larger facility.
With its recent investments, Universal Store said its cost of doing business increased vs PCP, whilst also absorbing inflationary pressures.
Its largest brand, Perfect Stranger, is expected to expand by seven stores by the end of H1 FY23, with one location still to open pre-Christmas. Universal Store seeks to expand and cluster the store rollout plan by state.
The pursuit of new sites for Universal Store is also ongoing for the company, with two new stores to open pre-Christmas in addition to a further 4-5 stores expected to open in H2FY23.
Universal Holdings Group expects ‘channel mix’ to continue to normalise through the balance of FY23.
YTD FY23 performance is promising for the company, as it cited the return of face-to-face socialising should lead to favourable conditions.
"It is clear that we will continue to see external challenges in the year ahead with the continued impact of COVID-19, uncertain consumer confidence, increasing costs and supply chain disruption," Birtles said. "However, we remain confident that we have a flexible business model, a robust balance sheet, and strong leadership and team culture that will enable the Company to grow.
"We will continue to invest in the growth of our Universal Store business and we are optimistic over the potential for both Perfect Stranger and Thrills businesses."
Universal Store Holdings owns a portfolio of youth fashion brands and omnichannel retail and wholesale businesses. The company’s principal businesses are Universal Store and Thrills, and it is currently trialling the Perfect Stranger brand as a standalone retail concept.
The company, excluding Thrills, operates 80 physical stores across Australia and two online stores.