Nick Scali (ASX:NCK) Up 60% in 2025: Can UK Expansion Drive Another Leg Higher?

Nick Scali (ASX: NCK) has delivered one of the standout performances among ASX retailers this year, with shares climbing approximately 60% despite challenging consumer conditions. Bell Potter has now initiated coverage with a buy rating and $27.00 price target, implying 15.5% upside from the current share price of $23.38. Combined with an expected 2.7% dividend yield in FY26, the total potential return sits around 18%. In our view, this signals growing confidence that Nick Scali’s UK expansion could unlock a meaningful new growth chapter.

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Bell Potter Calls Nick Scali “Unmatched” Among ASX Retailers

Bell Potter describes Nick Scali as an “unmatched furniture retailer” within the ASX 200, citing its industry-leading EBIT margins compared to global peers in the household goods sector. We believe this reflects the company’s rare ability to generate superior profitability from its vertically integrated model, a competitive moat rivals have struggled to replicate.
The stock has quietly compounded at approximately 21.5% annually since listing in 2004, delivering gains of nearly 6,000%. What sets Nick Scali apart is its gross margin consistently above 60%, well ahead of competitors like Adairs’ Focus on Furniture in the low 50s.
The broker believes the current valuation of around 26x FY26 earnings is justified given these margin advantages. Management’s track record with the Plush acquisition adds confidence, having lifted that brand’s gross margins from 54.8% to 62.7%. This suggests the team knows how to extract value from underperforming retail assets.

UK Expansion Could Triple Store Footprint

The real growth story lies across the pond. Bell Potter sees long-term potential of approximately 60 stores in the UK, a threefold opportunity versus the current footprint. Nick Scali entered the UK in May 2024 through its acquisition of Fabb Furniture’s 21-store network.

Early signs suggest the strategy is working:

• UK gross margins improved from 47.1% in FY25 to 58.3% in Q1 FY26, approaching the 58-60% target
• The Nick Scali product is resonating well with UK consumers at competitive price points
• Break-even revenue sits at approximately $53 million once all stores are rebranded

As UK revenues grow over the next seven-plus years, Bell Potter expects continuing earnings leverage, delivering stronger profit uplift over the longer term. We believe this represents the most compelling growth lever in the investment case.

The Investor’s Takeaway

Nick Scali’s domestic business continues to outperform. Q1 FY26 written sales orders across ANZ rose 11.6% year on year, with same-store orders up 10.7%. The company expects first-half revenue growth of 7-9%, demonstrating genuine market share gains.
ANZ statutory NPAT for 1H FY26 is expected at $39-40 million, up from $34 million the prior year. This positions the core business to fund UK expansion without balance sheet strain.
However, UK statutory losses are expected at $5-6 million in the first half, and international retail expansions carry inherent risks. We believe the success probability is higher than typical offshore ventures given management’s track record, but investors should size positions accordingly.
CEO Anthony Scali holds approximately 8% of the company with a 20-year track record of value creation. For growth investors comfortable with execution risk, Nick Scali offers rare domestic resilience combined with meaningful international upside.