Universal Store Holdings has reported a strong end to FY26 at the top end, with the group’s bottom line slipping amid an impairment charge on the Thrills brand.
The group – which also manages Perfect Stranger as well as its namesake fashion retail business – reported a 12.9 per cent lift in total sales in FY26, hitting $376.1 million. Universal Store led most of this bump-up, with its sales jumping by 11.5 per cent to $313.3 million.
Perfect Stranger is also going strong, with a 40.8 per cent lift in total sales to $35.9 million.
Both of these also saw decent like-for-like sales growth of 8.1 per cent and 13 per cent respectively.
However, the company’s Thrills business – which it acquired in late 2022 – saw a 9.2 per cent decline in total sales of 9.2 per cent, dropping to $36.4 million, driven down by its wholesale channel. The brand’s direct-to-consumer segment saw a 4.2 per cent lift in total sales.
Thrills performance has led Universal Store to issue a non-cash impairment charge against the Thrills business, amounting to $23.8 million. This includes $18.6 million in goodwill against Cheap Thrills Cycles (the main operations), as well as $5.2 million against the Thrills brand name.
This led to the group’s net profit after tax (NPAT) falling by 21.6 per cent to $18.2 million.
This is not the first time the Thrills business has had impairment charges issued against it, with similar write-downs reported in FY25. Minus these charges, Universal Store Holdings’ underlying NPAT was $40.5 million for FY26, which is up by 16.3 per cent on the prior year.
Meanwhile, the group’s underlying earnings before interest and tax (EBIT) grew by 17.2 per cent to $64 million.
The group also lifted its gross profit margin by 140 basis points to 62.5 per cent.
“The team delivered another strong full-year result, with robust sales and gross margin growth,” group CEO Alice Barbery said. “This performance reflects the continued excellence in providing our customers with on-trend products, a service-oriented experience and engaging communications.
“The group is well positioned heading into FY27. Our observation is that our customer remains willing to spend on quality, on-trend clothing from brands they love. As always, we continue to focus on cost discipline as we invest in our team and system capability to support future growth.”
On Thrills’ snag in particular, the brand saw an 18.9 per cent fall in its wholesale sales, due to reduced imports to the United States, as well as the closure of a small number of key retail accounts and lower intercompany sales.
The brand’s online sales were also down, falling 10.5 per cent on the prior year, reflecting the transition to a lower promotional and clearance sales mix.
Amid the sales slip, Thrills’ FY26 gross margin grew by 240 basis points to 45.3 per cent due to a higher retail sales mix and improved price management.
Thrills opened a new store in FY26, with nine stores now operating as of June 30, excluding the web store.
The group’s Universal Store retail business reported a private brand penetration stabilising at 51 per cent of sales, down just one percentage point on FY25. Neovision, Common Need and Luck & Trouble are the top three brands within Universal Store.
The retailer ended FY26 with 88 stores.
Meanwhile, Perfect Stranger sales grew amid an increased average unit price associated with elevated product quality and refined collections, the group reported.
“Investment in Perfect Stranger dedicated resources has supported an evolving product range, growing brand awareness and retail execution,” Universal Store Holdings reported.
Perfect Stranger now has 26 stores as at June 30, with seven openings during the year.
The group also shared early FY27 DTC performance figures for the first seven weeks of the new financial year, with Universal Store sales up 5.5 per cent, Perfect Stranger up 45.8 per cent and Thrills up 10.1 per cent (excluding wholesale).
Universal Store reported like-for-like sales growth of 2.9 per cent in the same timeframe, 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.
As for Thrills, it reported a 3.8 per cent lift in LFL sales, cycling a 4 per cent lift in early FY26.
Universal Store Holdings issued a fully franked 17 cents-per-share dividend, bringing the fully franked full-year dividend to 43 cents per share. This is up 11.7 per cent on last year.
The company ended FY26 with net cash of $23.3 million, up 35.5 per cent on the prior year.