DUSK GROUP LIMITED (DSK)
Share Price Analysis and Chart

22/05/2023

1

Buy

$1.80

90.48%

Previously, it had been Shaw and Partners' view that Dusk Group looked ideally positioned for growth over the long-term. On Friday, the company updated FY23 guidance well below the broker's forecasts, and the share price tumbled in response.

Rising interest rates and pressure from cost of living expenses have impacted on customers more than anticipated, explains the broker. It is noted sales remain well ahead of pre-covid levels and new stores are still being opened.

Forecasts have been slashed in response. Shaw points out H2 of FY23 is now poised to become the worst period since the company listed, and it will be the first loss-making period since the second half of 2019.

One rare positive from management's profit warning is the gross margin is expected to remain broadly in line with the prior year's 67.7%, the broker suggests, implying less promotional campaigns.

Buy rating retained (with the analyst maintaining his longer term confidence). Price target tumbles to $1.80 from $2.50.

FORECAST
Shaw and Partners forecasts a full year FY23 dividend of 11.00 cents and EPS of 17.60 cents.
Shaw and Partners forecasts a full year FY24 dividend of 8.00 cents and EPS of 13.20 cents.