Dusk Group Records 8.4% Sales Growth and Plans South Africa Expansion

Record Sales and Margin Expansion Amid Strategic Rejuvenation

Dusk Group Limited (ASX:DSK) has capped FY26 with a robust 8.4% increase in total sales, reaching $148.9 million, the highest in its history. Underlying EBIT climbed 15.6% to $8.9 million, reflecting operational efficiencies and a refined product offering. The company’s gross profit margin expanded 100 basis points to 64.6%, aided by a successful Signature Collection refresh and favourable foreign exchange movements in the second half.

The home fragrance retailer’s strategic pivot towards core product rejuvenation and a wider price architecture has driven a 7.8% like-for-like sales uplift, with stores growing 6.4% and online channels surging 16.9% to $12.7 million. Online penetration now stands at 8.5%, surpassing pre-COVID peaks, underpinned by enhanced customer journeys and targeted digital marketing.

AfterGlow Store Concept and Loyalty Program Fuel Growth

The rollout of the AfterGlow store concept across eight locations has delivered a 22% increase in like-for-like sales and a 100 basis point gross margin improvement, outperforming expectations. This new retail format is central to Dusk’s store portfolio optimisation, which included closing 12 underperforming stores and opening six new ones during the year, resulting in a net decrease to 144 stores.

Dusk Rewards, the company’s loyalty program, reached a record 768,000 members, an 18% year-on-year increase. Members now account for 59% of total sales, with average transaction values of $60 compared to $52 overall. The program's expansion has been supported by a new CRM platform, enabling personalised engagement and driving both acquisition and retention.

Financial Position and Dividend Declaration

The group ended FY26 with a net cash position of $18.3 million and no drawn debt, maintaining a strong balance sheet to support growth initiatives. Inventory levels rose to $21.2 million, aligned with the company’s growth strategy and product availability goals. The Board declared a fully franked final dividend of 1.6 cents per share, bringing total dividends for the year to 5.6 cents per share, down from 7.0 cents in FY25, which included a special dividend.

Navigating Regulatory Challenges and Future Growth Plans

Dusk is currently subject to Federal Court proceedings initiated by the Australian Competition and Consumer Commission (ACCC) over alleged breaches of button battery safety standards. The Board is actively overseeing the matter, which remains at an early stage with uncertain financial implications. The company has enhanced its compliance and governance frameworks in response.

Looking ahead, Dusk is sharpening its core ranges and expanding into adjacent categories, including Bath & Body products, which now represent 6.4% of sales and target a younger demographic. The company plans to launch an enhanced loyalty program in the second half of FY27 to boost purchase frequency and customer lifetime value.

International expansion is a key strategic focus, with South Africa identified as the initial market for a disciplined pilot involving 3-5 stores and an e-commerce platform in calendar year 2027. This move leverages the successful rejuvenation of the Australian business and aims to test market fit and scalability before broader rollout.

Operationally, Dusk will continue to optimise its store network, including AfterGlow refurbishments and mini-refurbishment trials, while investing in team capability and visual merchandising to enhance customer experience.