Universal Store Holdings: Fashion Victim

About the author:

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).

Find out more

If you would like more information, please contact your adviser or nearest Morgans office. 

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.