Universal Store Holdings has reported a robust first half of FY26, with sales and profits climbing significantly across its key brands, supported by margin gains and strategic investments.
- Group sales up 14.2% to $209.6 million
- Underlying EBIT rises 23.2% to $43.6 million
- Gross profit margin expands by 150 basis points to 62.1%
- Perfect Stranger sales surge 41.5%, Universal Store grows 11.9%
- Interim dividend increased by 18.1% to 26.0 cents per share
Strong Sales and Margin Expansion Drive Growth
Universal Store Holdings Limited (ASX: UNI) has delivered a compelling half-year performance for the six months ending December 2025, showcasing solid momentum in Australia’s youth casual fashion sector. The Group’s total sales rose 14.2% to $209.6 million, underpinned by strong contributions from its flagship Universal Store brand, as well as the Perfect Stranger and CTC (THRILLS) labels.
Gross profit margins improved by 150 basis points to 62.1%, reflecting effective pricing strategies and a favourable product mix dominated by private brands and third-party assortments. This margin expansion was a key driver behind the 23.2% increase in underlying earnings before interest and tax (EBIT), which reached $43.6 million.
Brand Performance Highlights
The Universal Store brand itself posted sales of $174.8 million, up 11.9% year-on-year, with like-for-like sales growing 8.7%. The brand’s focus on on-trend, quality apparel and premium pricing continues to resonate with its discerning youth customer base. Neovision, Perfect Stranger, and Common Need remain the top private labels within the Universal Store portfolio, with Neovision alone contributing 19% of sales.
Perfect Stranger experienced a remarkable 41.5% jump in sales to $17.8 million, driven by a 14.8% increase in like-for-like sales. The brand’s elevated product range and targeted marketing efforts have attracted new customers without cannibalising Universal Store sales. Meanwhile, CTC’s sales grew 4.8% to $23.2 million, buoyed by a 25.5% increase in direct-to-customer sales, despite a decline in wholesale due to external tariff pressures affecting exports to the US.
Strategic Investments and Cost Discipline
Management highlighted ongoing investments in team capability and technology infrastructure to support future growth, which alongside increased incentive provisions, led to a slight rise in the cost of doing business to 31.4% of sales. Despite this, the Group maintained disciplined cost control, ensuring profitability gains were preserved.
The company’s net cash position remains strong at $38.4 million, providing flexibility amid a backdrop of rising interest rates and currency fluctuations. Universal Store continues to hedge foreign currency risks prudently and manage pricing strategies to mitigate these headwinds.
Outlook and Market Positioning
Looking ahead, Universal Store is on track with its new store rollout, having opened eight stores in H1 FY26 and planning five more in the second half. The Group remains cautious about volatility in CTC’s wholesale channel, particularly as it cycles previous year sales impacted by US tariffs. However, direct-to-customer channels continue to show encouraging growth.
CEO Alice Barbery emphasised the Group’s commitment to delivering quality, on-trend fashion and a service-oriented experience to its youth market, while maintaining cost discipline and investing in capabilities to sustain long-term growth.
Bottom Line?
Universal Store’s strong H1 momentum sets a confident tone for FY26, but currency and tariff challenges warrant close monitoring.
Questions in the middle?
- How will Universal Store navigate ongoing volatility in CTC’s wholesale sales amid tariff pressures?
- What impact will rising interest rates have on consumer spending in the youth fashion segment?
- Can Perfect Stranger sustain its rapid growth without cannibalising other brands?