Pinned straw:
$DSK announced their FY23 results. NPAT down -37.3% on flat revenue y-o-y (-0.6%)
LFL sales down -13.2% (stores -11%; online - 35%), so overall revenues held up by store openings.
The outlook is interesting, with one of the heavier YTD FY24 revenue declines reported this season.
Unsurprising, as this might be one of the more discretionary sectors.
Disc: Not held ... but tracking the retail sector more generally.
The real story with some of these more operationally levered retailers will be watching that leverage unravel. DSK is a great example. CODB went from ~55% in 2019 to ~40% in 2021 and is now back up to ~50%. Gross margin is more or less back to its pre-covid level. Assuming the economy doesn't fall into a heap, we're probably getting to something approaching steady state for DSK. Unfortunately, if you plug in steady state GPM and CODB the bottom line gets really wrecked even from here ~$5.5m NPAT. I'd argue that the sales decline in FY24 is more to do with the business getting back to regular non-covid trading than reading too much through to consumers: It's a big number on the way down because it was a big number on the way up.
OTOH, these guys are pretty well placed to weather the storm given the state of the balance sheet. It's more like do I have much interest hanging around in a scented candle business waiting for the next time that operating leverage starts to flex? No. lol