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Why the Nick Scali (ASX:NCK) share price will be on watch today

The Nick Scali Limited (ASX: NCK) share price will be in focus this morning after providing an update to its business operations. We take a closer look.
The post Why the Nick Scali (ASX:NCK) share price will be on watch today appeared first on The Motley Fool Australia. –

asx share price on watch represented by lady looking through pair of binoculars

The Nick Scali Limited (ASX: NCK) share price will be in focus this morning. This comes after the company announced a trading update and profit guidance to the ASX.

At Monday’s market wrap, the furniture retailer’s shares finished the day at $10.70.

How is Nick Scali performing?

Nick Scali shares could be on the move today as the company reported to have continued its positive trading momentum.

According to this morning’s release, Nick Scali delivered growth in written sales orders of 50% through Q3 FY21. Same-store written sales orders also increased by 41% over the prior corresponding period (pcp).

In April (the first month of Q4 FY21), written sales orders jumped 242% when compared against this time last year. Nick Scali attributed the performance to its stores being opened for trading, unlike the widespread closures experienced in early 2020. However, when not factoring in the impact of COVID-19, written sales orders lifted 37% from April 2019.

The company further provided an update on revenue, revealing FY21 year-to-date sales revenue growth is roughly 44% to 30 April. This does not include the container availability issues that have affected Nick Scali’s supply chain. It’s expected that the sales revenue achievement will run throughout Q4 to finish the FY21 strongly.

As a result, earnings before interest, tax, depreciation and amortization (EBITDA) for FY21 is projected to be $120 million. Net profit after tax (NPAT) is forecasted to be between $78 million and $80 million. This represents a surge of 85% to 90% on the previous comparable year.

Nick Scali lastly noted that its order bank remains at elevated levels, setting up the groundwork for revenue growth for FY22.

Nick Scali share price summary

Over the last 12 months, the Nick Scali share price has been on an upwards trajectory, rising close to 150%. The company’s shares reached an all-time high of $11.95 in February after releasing its half-year results.

At today’s prices, Nick Scali has a market capitalisation of approximately $866 million, with 81 million shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Nick Scali (ASX:NCK) share price will be on watch today appeared first on The Motley Fool Australia.

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