Well I guess that answers the question about whether scented candles are a discretionary purchase. Dusk's trading update today may even be worse than some were thinking. The second half of the financial year is always a much quieter period for them but with consumers keeping wallets shut, it's actually going to be a loss making half this year.

Having said that, underneath is a business that does make good money under normal circumstances and is maintaining its gross margin at close to 70%. If the economy were to go to hell in a handbasket you might pick this up for a steal in the next 12 months. The big BUT though is a pending CEO transition and it might be worth waiting to see what the new dude is bringing to the table.

[on watchlist only]

Dusk could face further challenges convincing a skeptical share market of its merits following the resignation of long time CEO/MD Peter King. Trading on a trailing EV/Earnings under 6x, the market seemed doubtful candles and diffusers were a non-discretionary purchase. That view is likely to harden until new management can prove otherwise.

There appears to be nothing untoward with Peter King's decision given his intention to stay at the helm until mid year and provide a thorough handover to his successor. An update on the recruitment progress will be given at the 1H result in Feb.

[not held]

Dusk's trading update shows a 12% revenue fall compared to last year, which I think they had largely already flagged but we'll see if the market cares. It's probably not a terrible result given store trading days were down 24% due to lockdowns, retail foot traffic has been subdued his re-opening and they're cycling such a high comparative. They've still maintained an extraordinarily high GM given what they sell and a very healthy EBIT. I used to own it and it treated me well. I only really sold it because I had higher conviction ideas but I wouldn't be adverse to rebuying it at some later point. Interestingly this comes from the same origins as Shaver Shop (which I have continued to own) and shares some of the same Board too.