Universal Store Holdings: Fashion Victim

About the author:

Alexander Mees
Author name:
By Alexander Mees
Job title:
Co-Head of Research and Senior Analyst
Date posted:
25 May 2023, 8:00 AM
Sectors Covered:
Gaming and Retail

  • Universal Store Holdings (ASX:UNI) has indicated that its sales momentum stalled in April and May, suggesting the youth consumer is finally starting to pull back on discretionary expenditure in the face of relentless pressures on the cost of living. Although UNI’s guidance for this year’s sales falls only 3-4% below our forecast, it is the implication that the external malaise will persist well into next year that caused shares to fall sharply today. We believe UNI will not be the last retailer to report on a slowdown in sales in 4Q23.
  • We have lowered our EBIT forecast by 13% to $39.8m in FY23 and by 23% to $43.7m in FY24. UNI’s gross margins are holding up well and its inventory position is clean. We maintain an ADD rating and lower our target price to (login to view).

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