Oh the brewing fragrance of numbers! Well, that’s what dusk’s (ASX: DSK) recent trading update says – to say the least for the latter half of FY24. It has been pungently-challenging for Australian home fragrance retailer dusk, but they are expecting a positive shift despite the chaos.
With the second half of FY24, total sales are expected to be around $126.3 million, an 8.2% decrease compared to FY23. EBIT (Earnings Before Interest and Tax) is expected to be in the range of $6.2 million to $6.4 million, significantly lower than FY23’s $16.5 million. Despite the decline in earnings dusk has managed their healthy financial position with Net cash of $20.8 million at the end of the period.
CEO and Managing Director Vlad Yakubson said: “FY24 has been a time of transformation at dusk as we laid the foundations for the rejuvenation of the business, with significant changes made to the leadership team over the past 12 months.”
Best known for its opulent candles, vivid displays and captivating scents, dusk has been struggling to juggle between economic dynamics and consumer whims. During 2H FY24, they witnessed a positive sales trend with +0.4% growth on pcp.
This improvement is attributed to strategic initiatives which includes, product refresh, revamped online presences with their website relaunch in June 2024, and targeted promotions, as seen on Mother’s Day week with total sales up 10.4%.
“The executive team brings new ideas and fresh perspectives to trading the business and developing products that appeal to our customers. In 2H FY24, we have progressively arrested the sales decline and more recently moved into positive growth,” added Yakubso.
The Company also managed to maintain their gross margin rate around the same level as FY23 (64.1%) through effective promotional strategies and supply chain management, despite headwinds from logistics costs.
Adding a touch of nostalgia and scrumptious delight in their fragrance offerings (candy flavoured candles, oils, room sprays & bath bombs), dusk’s collaboration with Australian confectionery Allen’s Lollies, has sparked a sales increase, contributing to dusk’s total sales which rose 28% in the first two weeks of FY25 compared to the previous year.
“Looking ahead to FY25, we are in a strong financial position and our inventory is clean and well balanced. We continue to focus on delivering product innovation and the latest trends to our customers on a regular basis.” Vlad Yakubso further added.
dusk shares reached a high of $0.820 in early morning trade, representing a 38.98% increase on the previous closing price of $0.590. However, the stock remains well below its 2020 IPO offer price of $2.00
Sidra is a Business Writer with The Sentiment
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1 Comment
Shraddha13
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