Dusk enters FY27 with stronger sales and a South Africa test ahead

Dusk carries sales momentum into FY27

Dusk Group Limited (ASX:DSK) has reached the more useful part of its turnaround: the business is growing while carrying fewer stores. Total sales rose 5.7% in the first 15 weeks of FY27, with like-for-like sales up 7.2%, despite the network being six stores smaller than a year earlier. Gross margin dollars increased 6.9%, and management expects first-half gross margin to remain above the prior corresponding period.

The update builds on a record FY26, when sales reached A$148.9 million, up 8.4%, while like-for-like sales rose 7.8%. Underlying EBIT increased 15.6% to A$8.9 million and underlying net profit after tax rose 7.6% to A$6.6 million. The result extends the recovery described in the FY26 results update, which attributed growth to product rejuvenation, online momentum and the AfterGlow store concept.

Core products are doing more of the work

Dusk says the sales mix is shifting away from fashion-led products towards replenishable core ranges. That change is central to management’s claim that sales should become more predictable and operations simpler, although the filing does not provide a separate earnings forecast for FY27.

The Signature Collection refresh delivered double-digit sales growth against the prior range, while Bath & Body increased to 6.4% of sales in FY26 from 5.3% a year earlier. Dusk is targeting more than 10% of sales from Bath & Body within two years, alongside a new youth unisex core range and an enhanced loyalty program planned for the second half of FY27. Its Rewards program ended FY26 with 768,000 active members, member sales of A$88 million and a 13% increase in member sales.

South Africa becomes a measured expansion bet

The next strategic step is international. Dusk plans to enter South Africa in the second half of FY27, beginning with three to five stores across no more than two metropolitan areas, supported by an online channel. No sites have been confirmed. Management describes the rollout as a test of product-market fit, customer acceptance, supply-chain capability and store economics, with any further expansion dependent on the results and on Australian performance.

The domestic rollout is still the priority. Dusk plans to extend the AfterGlow format to more than 10 new or refurbished locations during FY27, while closing underperforming stores and testing smaller Mini-AfterGlow refurbishments. Online sales reached A$12.7 million in FY26, up 16.9%, and the company finished the year with 144 stores, including two online stores.

Cash discipline meets unresolved regulatory risk

Dusk ended FY26 with A$18.3 million in cash and no debt, after investing in inventory and growth initiatives. The board declared a fully franked final dividend of 1.6 cents per share, taking the year’s total to 5.6 cents. That is below FY25’s 7.0 cents of ordinary dividends, which also included a 5.0-cent special dividend, and the chair said the decision reflected cash-management caution, growth investment and the ACCC Federal Court proceedings.

The proceedings, commenced in July 2026, concern alleged Australian Consumer Law issues and remain before the Federal Court. Dusk said it could not answer questions on the matter at the AGM. The company has disclosed no potential financial exposure in these materials, leaving the legal process as an open variable alongside the Christmas trading period and the first evidence from South Africa.