Australian fashion group Universal Store has recorded a 26.5% lift in total sales in FY23 compared to FY22 to $263.1 million, driven by growth across its three key brands - Thrills, Perfect Stranger and its eponymous label Universal.
Thrills recorded a revenue lift of 20.1% in FY23 to $41.8 million. Meanwhile, Perfect Stranger recorded a total sales increase of 187% to $8.9 million compared to FY22.
The company’s gross profit hit $155.3 million in FY23, up 28% on FY22. It also recorded a 23.8% lift in earnings before interest and tax to $40.4 million, and a net profit of $23.6 million, up 14.6% on the prior year.
First-half sales were up 34.5% - or 28.6% when excluding Thrills which was acquired by Universal on October 31, 2022.
However, trading in the second half of the year softened, with revenue growth of 17.8% - or 4.7% excluding Thrills.
Universal claimed this was influenced by consumer responses to the macro environment and the impact of rising living costs, exacerbated by interest rate increases. As a result, store traffic slowed but remained positive compared to the prior year.
Despite the challenges, the group achieved growth of 1.2% in like‑for‑like (LFL) sales compared to FY22, with store sales up 23.9% in FY23. Group online revenue grew 3.7% in FY23 and contributed 14.1% of total revenue.
Universal Store group CEO Alice Barbery said FY23 brought unique challenges and opportunities, transitioning from pandemic impacts to a now-dynamic and volatile consumer environment.
“During the year, we grew our store network, completed a strategically significant acquisition, moved to our new DC and Support office, and materially advanced the Perfect Stranger retail trial,” Barbery said.
“We now have three great retail brands that are well positioned for growth and a team that is excited to pursue these opportunities.”
Looking ahead, Universal will refine and expand Thrills’ direct-to-consumer (DTC) operations. The fashion label’s wholesale and DTC channels are reportedly performing well with wholesale order book indicating double-digit growth of the wholesale channel in the first half of FY24.
Despite the profit lifts overall, Universal Store’s cost of doing business (CODB) rose by 260 basis points to 33.5% of sales. The company cited an increase in employee costs, occupancy costs, and $8.6 million in expenses related to the Thrills acquisition.
The rise in employee costs was mostly driven by the Thrills acquisition, Universal noted, and having all stores trading during the period in contrast to the prior comparative period which saw lower spending due to mandated store closures.
Universal’s overall inventory increased by $6.3 million. The company cited strong demand, more appropriate stock levels held post-COVID, a larger distribution centre, new store openings and the integration of the Thrills business ($4.0 million).
Capex was at $10.2 million.
“Continuing to introduce fresh new products and brands that excite and meet our customers' ever-changing needs will be key to navigating successfully through the uncertain market conditions,” Barbery said.
“I am most pleased about the outstanding work my team is doing in refining our retail concepts, delighting our customers, approaching each challenge with a positive mindset, and readying our business for long-term growth.”
During FY23, Universal opened eight new stores, consisting of three Universal Store and five Perfect Stranger stores. When combined with the ten acquired Thrills stores, this totals 95 as of June 30, 2023.
Universal plans to open one or two new Thrills stores in FY24, four to six for Universal Store, and between five and eight new Perfect Stranger stores.