dusk’s Store Closures and Expansion Plans Signal Strategic Shift Ahead
dusk Group Limited reported a 5.1% rise in half-year sales to $91.8 million, driven by strong online growth and product innovation, while declaring a fully franked interim dividend of 4.0 cents per share.
- 5.1% increase in sales to $91.8 million for 1H FY26
- Online sales surged 16.5%, now 8.7% of total sales
- Underlying EBIT rose 3.5% to $14.3 million
- Net cash position of $35.8 million with no debt
- Plans to close 7 stores and open 2 in 2H FY26; international expansion under consideration
Strong Half-Year Performance
dusk Group Limited (ASX, DSK) has reported a solid first half for fiscal year 2026, with total sales climbing 5.1% to $91.8 million. This marks a record half-year result, underpinned by a 16.5% surge in online sales and steady growth in physical stores. The company’s refreshed product ranges, including the Signature collection and new Bath & Body category, have resonated well with customers, contributing to increased store traffic and higher average transaction values.
Gross profit rose in line with sales, reaching $59.9 million and maintaining a stable margin of 65.2%. Despite a 5.9% increase in costs of doing business, largely due to new store openings and pop-up initiatives, dusk managed to grow its underlying EBIT by 3.5% to $14.3 million. The statutory net profit after tax improved 5.2% to $10 million, reflecting disciplined cost control alongside strategic investments.
Digital Growth and Customer Engagement
Online sales now represent 8.7% of dusk’s total revenue, up from 7.9% a year earlier, highlighting the company’s successful digital transformation efforts. Enhanced website content and customer experience improvements have driven higher conversion rates, even as the business cycled a strong prior year. The dusk Rewards loyalty program continues to expand, boasting 718,000 active members, up 9% year-on-year, with member sales growing 24%, supported by targeted exclusives and events.
These initiatives have boosted the average transaction value by 8%, with both members and non-members spending more. The company’s focus on product innovation and broader price architecture has helped sustain momentum through key trading periods such as Christmas and Halloween.
Strategic Store Portfolio Adjustments
dusk operated 153 stores at the end of the half, a net increase of two stores compared to the previous year. However, the company is actively reshaping its footprint, particularly scaling back in New Zealand where the current portfolio does not align with its strategic goals. In the second half of FY26, dusk plans to close seven stores (four already closed) and open two new locations, aiming to improve overall earnings quality and operational efficiency.
Outlook and Growth Prospects
Looking ahead, dusk expects gross margins to remain stable in the second half, supported by a new Australian-made core product range and a refreshed Signature line. Early trading in the third quarter shows encouraging double-digit sales growth, driven by improved stock availability and ongoing product innovation. The company is also rolling out the AfterGlow store format and enhancing marketing and in-store service to strengthen its position as a year-round gifting destination.
CEO Vlad Yakubson emphasised that the past two years of strategic resets have laid a strong foundation for sustainable growth. While domestic earnings momentum remains the priority, dusk is exploring international expansion opportunities, with due diligence underway to test the appeal of its retail offering in selected markets.
Bottom Line?
dusk’s solid half-year results and strategic resets set the stage for cautious optimism, with international expansion the next frontier to watch.
Questions in the middle?
- How will dusk’s international expansion plans unfold amid evolving global retail conditions?
- What impact will the planned store closures and openings have on overall profitability?
- Can dusk sustain its strong online growth while maintaining cost discipline?
