Why Did Nick Scali Shares Sink Despite Strong Profit Growth-Are Investors Worried About UK Sales?
Source: Kapitales Research
Highlights:
Shares fell sharply despite a 36% rise in group net profit after tax.
Strong ANZ performance was offset by weaker UK revenue and ongoing losses.
Company declared a 39-cent interim dividend and plans further store expansion.
Market reacts sharply to mixed regional performance
Nick Scali Limited (ASX: NCK) came under heavy selling pressure after releasing its half-year results for the period ended 31 December 2025, with the stock dropping about 18.3% at the time of writing as investors focused on softer-than-expected sales trends in Australia and New Zealand despite strong profit growth. The furniture retailer reported group revenue of $269.3 million for H1 FY26, up 7.2% year-on-year, while statutory net profit after tax climbed to $41.0 million. Earnings growth was supported by improved gross margins and solid performance in its core ANZ business, although market sentiment turned cautious following weaker revenue from its UK operations.
ANZ growth overshadowed by UK challenges
The Australia and New Zealand segment delivered strong momentum, with revenue rising 13.1% to $251.7 million and net profit after tax increasing to $46.6 million. Written sales orders also improved during the period, reflecting steady demand and pricing strength. However, the UK division reported revenue of $17.6 million, significantly lower than the prior year due to prolonged store closures linked to refurbishment and rebranding programs. The segment posted a net loss after tax of $5.6 million, which weighed on investor sentiment despite management highlighting early signs of progress from rebranded stores.
Dividend boost and expansion plans ahead
Nick Scali declared a fully franked interim dividend of 39 cents per share, up 30% year-on-year, underscoring confidence in cash generation and profitability. The company also plans to expand its store network, targeting new openings across ANZ and further growth opportunities in the UK market.
Although the company delivered strong earnings growth and margin improvement, recent media coverage shows the results have already been reported by financial outlets, with many highlighting the contrast between robust ANZ performance and ongoing UK investment risks. As investors weigh growth prospects against short-term pressures in international markets, the sharp share price reaction suggests the market may be prioritising future earnings visibility over headline profit gains.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au
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Why Did Nick Scali Shares Sink Despite Strong Profit Growth-Are Investors Worried About UK Sales?
Highlights:
Market reacts sharply to mixed regional performance
Nick Scali Limited (ASX: NCK) came under heavy selling pressure after releasing its half-year results for the period ended 31 December 2025, with the stock dropping about 18.3% at the time of writing as investors focused on softer-than-expected sales trends in Australia and New Zealand despite strong profit growth. The furniture retailer reported group revenue of $269.3 million for H1 FY26, up 7.2% year-on-year, while statutory net profit after tax climbed to $41.0 million. Earnings growth was supported by improved gross margins and solid performance in its core ANZ business, although market sentiment turned cautious following weaker revenue from its UK operations.
ANZ growth overshadowed by UK challenges
The Australia and New Zealand segment delivered strong momentum, with revenue rising 13.1% to $251.7 million and net profit after tax increasing to $46.6 million. Written sales orders also improved during the period, reflecting steady demand and pricing strength. However, the UK division reported revenue of $17.6 million, significantly lower than the prior year due to prolonged store closures linked to refurbishment and rebranding programs. The segment posted a net loss after tax of $5.6 million, which weighed on investor sentiment despite management highlighting early signs of progress from rebranded stores.
Dividend boost and expansion plans ahead
Nick Scali declared a fully franked interim dividend of 39 cents per share, up 30% year-on-year, underscoring confidence in cash generation and profitability. The company also plans to expand its store network, targeting new openings across ANZ and further growth opportunities in the UK market.
Although the company delivered strong earnings growth and margin improvement, recent media coverage shows the results have already been reported by financial outlets, with many highlighting the contrast between robust ANZ performance and ongoing UK investment risks. As investors weigh growth prospects against short-term pressures in international markets, the sharp share price reaction suggests the market may be prioritising future earnings visibility over headline profit gains.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au