Dusk Group (ASX:DSK) isn’t smelling so good after its 1HY23 results

Nick Sundich Nick Sundich, February 24, 2023

Dusk Group (ASX:DSK) is the latest company that saw a sales growth amidst the pandemic to report a ‘return to normal’ in its 1HY23 result. This company provides home fragrance products including candles, diffusers and essential oils, both online and at its network of ~140 stores. 

 

 

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DSK has some good metrics, but sales and earnings are down

Turning to the figures that matter most, although DSK’s total sales grew 7.6%, this figure was only higher due to lockdowns that closed a number of stores in the prior corresponding period.

Like for like sales, which means total sales excluding stores closed because of COVID, fell by 10.4%. Online like for like sales fell by 37.8%, reflecting the return of consumers to brick and mortar stores. The company’s NPAT was $13.3, which was 9.5% lower and represents a 15.5% margin (down from 18.4%). 

There were some metrics that appeared positive, however. One was the continue growth in its reward program from 718,000 to 722,000. These members accounted for 59% of total sales and had a higher average transaction value compared to non-members. 

Most pleasingly for investors, DSK paid an interim dividend of 8c per share which was an 8.5% yield on an annualised yield. 

 

An uncertain outlook

DSK also reported that total sales for the first 7 weeks of 2HY23 were 3% lower compared to the prior corresponding period and it declined to give FY23 earnings guidance.

The company is looking for a new CEO, to replace Peter King, and it will open 6 further stores in the coming months. 

 

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