Universal Store Doubles Down on Growth with 15.5% Revenue Surge in FY25

• FY25 revenue up 15.5% to $333.3 million
• Underlying NPAT rises 15.2% to $34.8 million
• Dividend increased to 38.5 cents per share, fully franked
• 12 new stores opened across key retail formats
• Goodwill impairment on CTC acquisition offsets wholesale challenges

Strong Financial Momentum Amid Retail Volatility

Universal Store Holdings Limited (ASX, UNI) has delivered a compelling FY25 performance, with group revenue surging 15.5% to $333.3 million and underlying net profit after tax growing 15.2% to $34.8 million. This growth reflects the company’s disciplined focus on agile product curation, customer trend responsiveness, and operational efficiency, enabling it to navigate a challenging retail environment marked by volatility and competitive discounting.

Underlying earnings per share rose to 45.4 cents, supporting a fully franked dividend increase to 38.5 cents per share, up from 35.5 cents in FY24. The company’s robust cash flow generation and disciplined inventory management have strengthened its balance sheet, ending FY25 with $17.2 million in net cash.

Expanding Retail Footprint and Brand Portfolio

Universal Store’s growth strategy continues to hinge on expanding its retail footprint and enhancing its portfolio of premium youth fashion brands. The group operates three distinct retail formats, Universal Store, Perfect Stranger, and CTC, with a total of 114 physical stores across Australia. In FY25, the company opened 12 new stores, including five each for Universal Store and Perfect Stranger, and two for THRILLS under the CTC umbrella. The Perfect Stranger format, in particular, has seen rapid expansion, contributing 7.6% of total group sales compared to 4.8% the prior year.

While the wholesale segment of the CTC business faced headwinds leading to a goodwill impairment charge, the retail channel and the Worship brand within CTC demonstrated strong growth, underscoring the group’s confidence in the retail strategy for this segment.

Investing in Capabilities and Sustainability

Beyond physical expansion, Universal Store is investing heavily in digital marketing, customer data analytics, and new point-of-sale and human capital management systems to enhance customer engagement and operational efficiency. These investments aim to support the company’s ambition to grow its store network beyond 100 locations and deepen its connection with the 16-35 year-old fashion-conscious demographic.

The company also reaffirmed its commitment to sustainability and governance, focusing on reducing environmental impact, promoting transparency in its supply chain, and fostering diversity and inclusion. Women represent 71% of the workforce, 45% of senior leadership, and half of the board, reflecting a strong emphasis on gender balance.

Positive Start to FY26

Trading in the first 17 weeks of FY26 indicates continued momentum, with direct-to-customer sales up 13.7% year-on-year. Like-for-like sales growth remains solid across Universal Store and Perfect Stranger formats, while the CTC wholesale channel continues to face challenges. The company remains on track with its store rollout plans, having opened four new stores year-to-date and planning several more before Christmas.

Management’s cautious approach to new store profitability and lease renewals suggests a balanced focus on sustainable growth rather than aggressive expansion.

Bottom Line?

Universal Store’s FY25 results and early FY26 trading reinforce its position as a resilient player in youth fashion retail, though the CTC wholesale segment remains a watchpoint.

Questions in the middle?

• How will Universal Store address the ongoing challenges in the CTC wholesale channel?
• What impact will new digital and point-of-sale systems have on customer experience and operational efficiency?
• Can the company sustain its store rollout pace while maintaining profitability amid retail market volatility?