Major furniture retailer Nick Scali plunges after ‘nasty’ update in wake of $980,000 cyber attack
A recent cyber attack has come with a nearly $1 million bill as the furniture giant <a href="https://bitcomme.com/forrester-warns-ai-costs-will-cut-b2c-<a href="https://bitcomme.com/what-happened-at-high-point-market/” title=”What happened at High Point Market?”>marketing-plans/” title=”Forrester warns AI costs will cut B2C marketing plans”>warns investors of a consumer slowdown. It’s share price fell more than 20 per cent at open this morning.
Major furniture retailer Nick Scali has warned investors it’s expecting a slump in sales as economic conditions crimp discretionary consumer spending. In a late-night market update on Wednesday, the $1.2 billion retailer provided a trading outlook for the first half of FY27 providing the “nasty” news.
The company said trading conditions in Australia and New Zealand “remained challenged during the first quarter”. Compared to the same time last year, store traffic is down about 10 per cent and written sales orders are down 15 per cent. That compares to 11 per cent growth in the comparative period a year ago.
“ANZ revenue for the first half is expected to be approximately 11 per cent to 14 per cent below the prior corresponding period,” the company said.
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Greg Canavan, the founder and Portfolio Manager at Canavan Capital Partners, described it as a “Nasty update from Nick Scali” which has already seen its share price slump more than 40 per cent since January.
“RBA getting its slowdown in domestic demand,” he said.
Based on the trading so far this financial year and the company’s current orders, it expects net profit after tax for the first half of the financial year to be between $28 million and $32 million.
“Consensus was at around $39m for the first half,” Canavan noted. “Going to be ugly.”
Upon open of the ASX on Thursday, the company’s share price immediately plunged more than 22 per cent before slightly recovering.
It currently trades for about $12.15 a share, down from a high of $25.72 at the beginning of the year.
Nick Scali in August revealed it was forced offline from a cyber attack after unauthorised access to its systems exposed details of customer orders including names, email address, delivery address and phone numbers.
“As previously announced, the Company experienced a cyber security incident in August which resulted in its ERP systems being unavailable for approximately three weeks. During this period, stores continued to trade, with sales orders processed manually,” the company said overnight.
It also revealed the incident came with a $980,000 bill incurred for consultants and legal advisers in relation to the cyber attack, which was excluded from its net profit projections and will be separately disclosed as non-underlying items in its financial results.
Despite the headwinds, the company which has 132 stores worldwide, is continuing to expand with two new ANZ stores set to open in late December.
