FY25 YTD Trading Update – Universal Store Holdings Limited (ASX: UNI)

Financial Performance Overview (Unaudited)
Universal Store Holdings Limited (UNI), a youth casual fashion retailer, has provided an update on its financial performance for the first 17 weeks of the 2025 financial year, ending 27 October 2024.

FY25 YTD Highlights:

  • Direct to Customer (DTC) Sales Growth:
    • +19.3% increase in DTC sales compared to the prior corresponding period (pcp).
  • Segment Breakdown:
    • Universal Store (US):
      • Total sales up +15.5% (LFL sales +13.8%, cycling -7.0%).
    • Perfect Stranger (PS):
      • Total sales up +111.1% (LFL sales +29.9%, cycling +4.6%).
    • Cheap Thrills Cycle (CTC):
      • Total sales up +7.4% (LFL sales +12.3%, cycling +6.3%).
  • Store Expansion:
    • The company is on track to open 9 to 15 new stores in FY25.
    • 3 new stores opened YTD, with an additional 4 stores opening before Christmas.
  • Wholesale Performance:
    • CTC wholesale sales down -16.8% YTD as of 30 September 2024.
  • Margins and Cost Pressures:
    • Gross margins in line with H2 FY24.
    • Cost of Doing Business as a percentage of sales is approximately 1% higher than the prior year, driven by inflationary pressures and investment in team capability.

CEO’s Commentary – Alice Barbery

CEO Alice Barbery commented on the positive start to FY25, highlighting:

  • Strong sales growth across the group, with robust gross margins maintained from H2 FY24.
  • The focus on customer-centric experience, agile product offerings, and efficient cost discipline.
  • A continued emphasis on building team and system capabilities to support future growth.

Trading Commentary

  • Universal Store (US):
    • Strong sales across both bricks-and-mortar (B&M) and online channels.
    • Increased sales in men’s and women’s categories, with notable growth in private brands like Neovision, Luck & Trouble, and Worship.
    • LFL growth is expected to moderate as the year progresses due to tougher comparatives from the prior year.
  • Perfect Stranger (PS):
    • Strong sales growth due to a growing customer base and refined product offerings.
    • All stores are profitable, and online sales are accelerating.
  • Cheap Thrills Cycle (CTC):
    • DTC sales continue to grow off a low base.
    • Wholesale channel sales are down -16.8% YTD, with continued volatility in the Australian wholesale customer base.
  • Store Expansion:
    • UNI is on track to open 9 to 15 new stores in FY25, having opened 3 stores YTD (2 PS stores and 1 US site).
    • Another 4 stores are scheduled to open before Christmas.

Gross Margins and Costs

  • Private Brand Performance: Strong performance from Neovision helped maintain gross margin benefits achieved in H2 FY24.
  • Cost Inflation: The Cost of Doing Business has increased by about 1% compared to the previous year due to inflation and investments in team capability and new POS, HCM, and ERP systems to support growth.

Conclusion

Universal Store is seeing strong growth in sales across its brands, maintaining healthy margins, and expanding its store footprint in FY25. However, the company faces cost pressures and continues to invest in systems and capabilities to support its future expansion.