Universal Store Posts 14% Sales Rise, Plans $24M CTC Impairment, Maintains FY26 Targets
Universal Store Holdings has posted a 14% rise in retail sales for the first 43 weeks of FY26, buoyed by strong like-for-like growth across its brands. However, ongoing wholesale challenges at CTC have triggered a $24 million impairment, even as the group maintains its full-year sales and EBITA guidance.
- 14% group retail sales growth in FY26 YTD
- CTC wholesale channel decline prompts $24m impairment
- Universal Store and Perfect Stranger show solid like-for-like gains
- FY26 sales guidance raised to $368-375m, EBITA to $61.5-64.5m
- Online sales dip due to reduced promotions
Robust Retail Growth Masks Wholesale Headwinds
Universal Store Holdings Limited (ASX:UNI) has delivered a 14.0% increase in group retail sales over the first 43 weeks of FY26, underscoring resilience amid a challenging economic backdrop. The company’s flagship Universal Store brand recorded an 8.5% like-for-like (LFL) sales lift, while Perfect Stranger surged with a 12.9% LFL gain, both signaling strong consumer demand in the youth fashion segment. Meanwhile, CTC’s retail stores posted a solid 17.9% LFL growth, although its online channel lagged with a 10% sales decline attributed to a pullback in discounting and promotional efforts.
These figures continue the momentum reported earlier in the year, building on a 14.2% sales rise in H1 FY26 that propelled underlying EBIT by 23.2% strong youth fashion sales. Universal Store’s network expanded modestly with four new store openings and one closure year-to-date, and another store is planned for June. Perfect Stranger has grown its footprint by seven stores, stabilising its physical presence for the remainder of the year.
Wholesale Channel Decline Spurs $24 Million Impairment
Despite these retail gains, CTC’s wholesale channel continues to deteriorate, reflecting structural challenges as key third-party retail partners close and intercompany sales to Universal Store diminish. Representing less than 5% of group sales after eliminations, the wholesale segment’s decline has prompted management to take a non-cash impairment charge of approximately $24 million against CTC’s intangible assets. This move echoes a similar goodwill impairment taken in FY25 amid comparable headwinds CTC goodwill impairment.
Guidance Reaffirmed Amid Macroeconomic Uncertainty
Universal Store has reaffirmed its FY26 guidance, targeting group sales between $368 million and $375 million, representing an 11.5% increase on FY25’s $333.3 million. Underlying EBITA is expected to grow 15.4% to a range of $61.5 million to $64.5 million. CEO Alice Barbery expressed confidence in the company’s trajectory despite geopolitical and economic uncertainties, noting no material shifts in sales trends during the year-to-date period.
While the retail brands continue to expand and deliver solid like-for-like growth, the online channel’s softness and the wholesale challenges at CTC remain areas to watch. The impending leadership transition, with Barbery set to retire later this year, adds another layer of strategic focus for investors to monitor as the company navigates these mixed signals CEO transition plans.
Bottom Line?
Universal Store’s strong retail momentum is tempered by structural wholesale issues at CTC and a cautious online channel, setting up a pivotal FY26 finish under new leadership.
Questions in the middle?
- How will CTC’s wholesale challenges evolve post-impairment?
- Can online sales rebound with renewed promotional strategies?
- What impact will the CEO transition have on strategic priorities?
