Pinned straw:
Looks like a pretty good response to the latest reports with the share price notching up 9ish %
ANZ - much of a muchness
UK - transitioning still with some downtime in the store conversion. Interestingly the commentary is that some stores with good staff are going well and those which are still the old brand are being used to clear out the old stock.
One part that I find interesting is the growth of online sales. It seems funny to me that people will buy a couch online without actually looking at it or seeing it in the flesh. Unless it's like the Apple model where you go into the shop/showroom and then order in the privacy of your own home without the pesky sales person trying to ram some additional products down your throat...
Hi @Jarrahman - I've been a shareholder IRL for a number of years - I consider it a core holding. Well run, founder led, conservatively geared, high quality business. Has a market leading ROE which they've maintained for a number of years. Great business model where cash from customers matches the outflow for stock (broadly) meaning working cap investment required due to growth is minimal compared to competitors. I think the ownership of properties is a bonus and there is some intrinsic value in the business because of that, that is rarely acknowledged - not only does it save rent but there is the opportunity to benefit from gains in value (queue @Strawman jumping in on the state of the Australian real estate market). It also provides a lot of dry powder/security if/when times get tough.
I am not worried about the UK acquisition - they paid bugger all for it, and are looking to convert it to the same capital light model they have in Australia. If it goes pear shaped (early signs are that it's going well, but it is early days), I think the cost will be manageable and it won't be a company killer (unlike some others).
NCK are all of that and more @lankypom - with one of their best attributes being high ROE, so better margins than their peers, which is really down to superior management. Nick Scali Management also tend to be very upfront with risks to the business, which can present some great buying opportunities when the market overreacts to those warnings, but as a rule, NCK management underpromise and then usually overdeliver, with some frank disclosures of both macro and individual risks sprinkled around every now and then.
Commsec is down this morning for maintenance, so I can't use their 10 year ROE graph, but here's what ChatGPT has to say about NCK's ROE over the past decade:
Nick Scali Limited (ASX: NCK) has demonstrated strong profitability over the past decade, with its Return on Equity (ROE) consistently exceeding 30%. The company's ROE peaked at 88.94% in FY2020, reflecting exceptional performance during that period. StockAnalysis+1StockLight+1
These figures highlight Nick Scali's consistent ability to generate high returns on shareholders' equity, underscoring its strong financial health and effective management strategies. assets.nickscali.com+2assets.nickscali.com+2StockAnalysis+2
For detailed financial statements and further information, you can refer to Nick Scali's annual reports available on their official website: nickscali.com.au.Annual Reports+11assets.nickscali.com+11assets.nickscali.com+11
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So, while I don't currently hold NCK, I regard them and ARB as two of the best consumer discretionary companies on the ASX, mostly because of their management quality and profitability, both still with a decent growth runway ahead of them. NCK through the UK currently, and ARB through the USA currently, although ARB are a global company in terms of sales - it's just that they are rolling stores out in the USA at this point in time - both ARB and NCK are fairly close to mature companies if you just viewed them in terms of their Australian stores, but their growth is mostly coming from outside of Australia now.
I do hold ARB in my super because they look cheap to me at current levels. NCK do not, but when NCK's SP does fall significantly, which it often does, I'm usually more than happy to buy back in. They always manage to navigate through or over whatever hurdles / obstacles they encounter along their journey. And that's down to superior management, IMO.