Nick Scali faces 15% ANZ order decline after cyber outage

ANZ slowdown drives first-half profit guidance

Nick Scali Limited (ASX:NCK) is heading into the key December trading period with its home market under pressure. Written sales orders in Australia and New Zealand fell 15% in the first quarter, reversing the 11% growth recorded in the same period a year earlier, while store traffic dropped by about 10%.

The furniture retailer expects ANZ revenue for the six months to 31 December 2026 to be 11% to 14% below the prior corresponding period. Based on trading so far and its current order bank, Nick Scali is guiding to underlying group net profit after tax of $28 million to $32 million for the half.

Cyber incident adds cost and operational uncertainty

The weak ANZ performance comes after an August cyber security incident left the company’s ERP systems unavailable for approximately three weeks. Stores continued trading and processed sales orders manually during the outage, but the announcement does not quantify the incident’s effect on sales timing, margins or cash flow.

Nick Scali expects to report about $980,000 in consultant and legal costs linked directly to the incident as non-underlying items. That means the $28 million to $32 million guidance range excludes those costs, which will be separately disclosed in the company’s financial results.

UK momentum provides a sharp regional contrast

The UK is supplying the brighter part of the update. First-quarter written sales orders rose 29% from the prior corresponding period, while like-for-like written sales orders increased 14%. The gap between the two measures partly reflects UK stores that were temporarily closed for refurbishment in the prior corresponding period.

The improvement extends the FY26 UK turnaround, when the UK loss narrowed after showroom rebranding. Nick Scali plans to open another UK store in late December, alongside two further ANZ stores expected to open around the same time. Two ANZ stores opened in July.

Margins and store expansion face a tougher test

Nick Scali says it remains focused on protecting gross margins, managing costs and expanding its store network while improving the UK operation. Those priorities will now be tested against weaker ANZ demand, a disrupted order-processing period and the need to convert the current order bank into revenue.

The next financial results should clarify how much of the first-half decline reflects softer customer demand and how much relates to the cyber outage or order timing. December’s store openings and the UK’s like-for-like performance will also provide an early test of whether the international recovery can keep carrying more weight in the group result.