DSK - Dusk Group

dusk is an Australian specialty retailer of Home Fragrance Products, offering a range of dusk branded premium products at competitive prices from its physical stores and online store. dusk currently has 115 Company owned and operated stores across Australia, with a target of approximately 160 stores by 2024 in Australasia, including a growing online presence via its website www.dusk.com.au.

dusk operates in the broader Australian retail industry and is an omni-channel specialty retailer focused on the Home Fragrance Market. In addition to participating in the Home Fragrance Market, dusk also operates in the gift products market which includes a range of other competing product segments (including flowers, chocolate, perfume and wine, together with other homewares and personal goods items).

It is anticipated that DSK will list on the ASX during November 2020.

dusk is pleased to confirm that outstanding sales and earnings growth have continued across the key trading months of November and December. dusk has also finished the half with a well-balanced inventory position, no drawn bank debt and significant surplus cash.

Based on unaudited financial results to the end of November and a preliminary estimate for December results based on actual sales, dusk provides earnings guidance in relation to its first half FY21 result as per the below:

(Actual) Sales .. $90.0 million to $90.5 million ( H1 FY21 Guidance) ... from $58.7 million (H1 FY20)
EBIT ................. $26.0 million to $27.0 million ( H1 FY21 Guidance) ..... from $9.7 million (H1 FY20)

Net cash as at the end of the first half FY21 will be approximately $33.5 million.

raised capital in Nov @ $2.00 a share. Issued 35mill shares; total on issue now 62.3mill

Since IPO; daily

I was doing some research on DSK last week @Dona Ferentes - the financials look very good and its pretty cheap on any metric I checked. The thing that held me back from putting any capital into the business is the very narrow, niche market which has basically no competitive advantage for DSK. I also checked for reviews from customers and they were nearly universally negative! Its hard to believe there is such a large market for candles & infusers, but they already have a big chunk of it, there are a couple of other big players according to my wife, so growth would seem to be limited.

When I dug a bit deeper it looks like they have got away with getting their product made very cheaply in China and then selling with very high gross margins - no pricing power there, so very exposed to competitors under cutting them on price.

In the end I couldn't really develop enough conviction about the future prospects of the business to be an investor.

galumay said:

I was doing some research on DSK last week @Dona Ferentes - the financials look very good and its pretty cheap on any metric I checked. The thing that held me back from putting any capital into the business is the very narrow, niche market which has basically no competitive advantage for DSK. I also checked for reviews from customers and they were nearly universally negative! Its hard to believe there is such a large market for candles & infusers, but they already have a big chunk of it, there are a couple of other big players according to my wife, so growth would seem to be limited.

When I dug a bit deeper it looks like they have got away with getting their product made very cheaply in China and then selling with very high gross margins - no pricing power there, so very exposed to competitors under cutting them on price.

In the end I couldn't really develop enough conviction about the future prospects of the business to be an investor.

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their outlets tend to be in shopping centres. And the discretionary Xmas spend would be a large component of sales. I'll give it a miss. Thx for your views.

Any candles, we get from the $2 shop

Dusk products are really good and often available after a 40 pc discount. So I wonder if the real prices are the ones available after the discount.
I do not hold this and fail to understand wherefrom the money comes from, as there is never more than one customer at the shop. The volume of purchase for most hardly goes beyond $120 on an average per person.
Simply Wallet website shows under various charting that it is an underpriced great stock.
I do not know how?
I do not understand the same way Shaver Group shops are hardly visited by customers. So is the Lovisa shops and their prices.
But stock prices are on a rising trend.
Why the directors and fundies are selling so heavily ??

Dusk Group says its pro forma financial 2021 net profit is up 225.5. per cent to $26.8 million on sales up 47.4 per cent to $148.6 million. It will pay a final dividend of 10¢ per share.

It said like for like sales climbed 32.7 per cent, with online sales up 27 per cent.

The apparent increased sales for scented products leads me to ponder the association between lockdowns and body odour.
Do the new work from homers shower as often as they did when going into the office?
Is the ongoing demand for scented products a side effect of lockdowns?

My call is the lockdowns have spiked the demand for scented product.
It's more to change the atmosphere of the home, ambiance.

I bought this company maybe six months ago. It took a dive. And I bought more.

Now it has a dividend yield of 9.26 percent, but until recently (that is, a few days ago) CommSec was saying that its dividend yield was less than one percent.

Dusk shares slid almost 20 per cent today after the retailer warned an “increasingly cautious consumer environment” was pushing sales and profits to levels below the last financial year.

With seven weeks left in this reporting period, Dusk said it expected sales to be between $135 million and $137 million for the year to June 30, compared to $138.4 million in the previous financial year. Earnings would be between $16 million and $17 million, compared to $26.5 million.

Looks like the candle has snuffed out.

galumay said:

Looks like the candle has snuffed out.

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Almost the definition of a discretionary product.

Knobby22 said:

Almost the definition of a discretionary product.

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Too true .. their products would be among the first to go.

Their only saving grace, and they do have 'campaigns' for such events, would be for mothers day, birthdays and the like with downgifting (gotta buy something , but not spend too much).

I have no interest in buying the shares atm, because of the impending recession, but Mrs buys a little bit in there so have been talking notice.

The shop she uses has been busy, but the staff say all the other shops are quiet. Gonna get interesting if things get worse.

Dona Ferentes said:

Too true .. their products would be among the first to go.

Their only saving grace, and they do have 'campaigns' for such events, would be for mothers day, birthdays and the like with downgifting (gotta buy something , but not spend too much).

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Problem is there is so much lower priced, low margin competition from Kmart, Target an BigW not to mention the party plan mums. Dusk cant compete on price, they rely on the big margin on their Chinese candles to support a single product, bricks & mortar business model. I reckon it was a risky business in good times, it will really suffer in recessionary type environments.

CFO / Company Secretary Appointment

dusk Group Limited (‘dusk’, ASX: DSK) today announces the appointment of Gordon Squire as its new Chief Financial Officer and Company Secretary. Gordon is a Certified Practising Accountant (CPA) with extensive senior finance leadership experience across the retail sector.

He is currently Head of Commercial, Finance and Operations (Performance Division) at Accent Group Limited (ASX:AX1) and was previously Chief Financial Officer (CFO) for Honey Birdette, a luxury lingerie and lifestyle brand.
Gordon has a Bachelor of Commerce from the University of Johannesburg, South Africa and a Master of Taxation Law.
Gordon will join dusk effective 22 July 2024 which will ensure a smooth handover from outgoing CFO and Company Secretary Kate Sundquist who leaves dusk on 26 July 2024.
CEO and Managing Director Vlad Yakubson said: “We are delighted to welcome Gordon to dusk and believe he will make a valuable contribution to the Company given his broad financial experience and strong operational background.
I look forward to working closely with Gordon as we continue to rejuvenate the dusk brand and further evolve our strategy to move the brand forward in the years ahead.
I would like to acknowledge and thank Kate for her hard work and commitment over seven years at dusk and wish her all the best in her future endeavours.”

The release of this announcement was authorised by the Board of Directors of dusk Group Limited.

i hold AX1 ( 'free-carried' ) and currently have a low-ball order for DSK in the market

and yes retail is still dead , but

FY24 Trading Update

dusk Group Limited (‘dusk’, ASX: DSK) today provides guidance and a trading update in relation to its expected FY24 results based on unaudited management accounts and other information for the 52 weeks to 30 June 2024.FY24

Overview

● Total sales are expected to finalise at approximately $126.3m (8.2% below FY23)
● Underlying EBIT1is expected to finalise in the range of $6.2-$6.4m (FY23: $16.5m)
● Net cash of $20.8m at period end (FY23: $16.0m)
● Inventory of $15.5m at period end (FY23: $15.2m)

During 2H FY24, the Group’s sales run rate continued to improve on a monthly basis with positive sales growth of +0.4% on pcp2 achieved for the last five weeks of the financial year.

In 2H FY24,total sales were 5.8% lower on pcp, compared to a decline of 9.7% in 1H FY24.

The improved sales performance in 2H FY24 reflects the implementation of various strategic initiatives which focus on product rejuvenation, tactical and disciplined promotional activity, and enhanced execution of our online channel in the later part of 2H FY24 following the website relaunch in June 2024.dusk’s importance as a gifting destination was highlighted during the Mother’s Day week with total sales up +10.4% on pcp, as our refreshed product range resonated well with our customers.

During 2H FY24, we have been diligent in maintaining gross margin through focused promotional activity and supply chain management.

The gross margin rate for FY24 is expected to be broadly in line with the prior year (FY23: 64.1%) despite headwinds from freight and distribution costs.

dusk had a strong start to FY25, with the launch of a new range in collaboration with Allen’s Lollies which has been well received by customers.

For the first 2 weeks of FY25, total sales are up +28%on pcp.

While we expect sales growth to moderate as the half progresses, the strong start to FY25 provides confidence in our strategy and is a great boost to the energy of our team.CEO and Managing Director Vlad Yakubson said: “FY24 has been a time of transformation at dusk1 Underlying EBIT is unaudited and pre-AASB16.

It excludes any non-cash impairment that dusk Group expects to recognise in its FY24 result that relates to the carrying value of Property, Plant & Equipment (PPE) in relation to certain under-performing stores.

This impairment is expected to be up to $0.5m.2

Prior corresponding period.as we laid the foundations for the rejuvenation of the business, with significant changes made to the leadership team over the past 12 months.

The executive team brings new ideas and fresh perspectives to trading the business and developing products that appeal to our customers.

In 2HFY24, we have progressively arrested the sales decline and more recently moved into positive growth.”

“Looking ahead to FY25, we are in a strong financial position and our inventory is clean and well balanced. We continue to focus on delivering product innovation and the latest trends to our customers on a regular basis.”

dusk Group will release its FY24 result on Thursday 29 August 2024.

For more information, please refer to the ASX announcement on 25 June 2024.The release of this announcement was authorised by the Board of Directors of dusk Group Limited.

i hold DSK

the market seems to love this ( currently up 27% )

curses seems to have ruined my chance to nibble some more ( cheap )

1H FY25 Results
dusk Group Limited (‘dusk’, ASX: DSK) today provides its half year result for the 26 weeks
ending 29 December 2024.
• Sales of $87.4m, +12.3% (1H FY24: $77.8m)
• Total LFL1 sales were +10.6% (Stores +7.4%; Online +68.0%)
• Gross profit of $56.9m, +13.4% (1H FY24: $50.2m)
• Gross profit rate of 65.1% (1H FY24: 64.5%)
• Pro forma EBIT2 of $13.8m, +20.0% (1H FY24: $11.5m)
• Net cash of $38.5m at period end and no debt (1H FY24: $31.1m)
• 151 stores at period end (1H FY24: 151 stores)3
• Inventory of $14.4m at period end (1H FY24: $17.6m)
• Interim dividend of 5 cents per share (fully franked)
• Special dividend of 5 cents per share (fully franked)
CEO and Managing Director Vlad Yakubson said: “We have had a strong start to FY25 with an
improved sales performance in the first half reflecting the execution of our product-led turnaround
strategy along with a focus on the digital store experience.
The online sales result has been one of the highlights of the overall business performance, being driven by elevated content, digital marketing and the capabilities of our new site.
The new leadership team along with talent renewal across the broader business have added significant value to the business which is evident in the results to date.
The Christmas period which is critical to the success of dusk’s overall annual performance,
exceeded our internal expectations driven by strong product sell-throughs and execution in store.
We are focused on continuing this positive momentum through to end of FY25 and beyond.”

1H FY25 Result Overview
Sales of $87.4m were +12.3% higher on pcp. LFL sales were +10.6% higher with stores +7.4%
higher and online +68.0% higher, on pcp.
1 LFL (like-for-like) sales calculation excludes stores closed for refurbishment.
2 Pro forma EBIT is unaudited and pre-AASB16.
3 Including two online stores
Online sales of $6.9m represented 7.9% of total sales. Click & Collect now accounts for 27% of
online transactions.
dusk’s gross margin of 65.1% was +62 basis points ahead of pcp despite continued headwinds
from currency volatility and higher freight costs.
To mitigate and partially offset these headwinds, we have identified and realised gains from supply chain efficiencies.
The CODB rate of 47.1% was flat vs pcp.
We continue to invest across the business where we can see positive ROI.
Furthermore, dusk continues to demonstrate tight cost control, whilst offsetting some of the ongoing inflationary pressures from mandatory increases in award wages and rent, with improved store productivity and tight wage control.
Membership in dusk Rewards4, loyalty program was 661,000 members compared to 703,000 in
1H FY24.
Whilst we have been successful in driving growth in sign-ups, the rate of acquisition and
renewal has not been sufficient to offset the number of memberships which lapsed in the period
(i.e. those initiated in July to Dec 2022).
As we broaden our appeal to new customer cohorts, there is significant upside from the renewal of our database and ability to communicate with a wider target customer group in the future.
In 1H FY25, members accounted for 48% of total sales (1H FY24: 56%).
The sales momentum that we are seeing as part of the brand rejuvenation has largely been driven by an increase in new shoppers at dusk and in particular, younger customers (15-22 year olds).
These customers are early in their customer journey with our brand, and we are optimistic they will see the value in our loyalty program as they continue to increase their shopping frequency with dusk.
Average Transaction Value (ATV) for members was $56, slightly lower than 1H FY24 ($57).
With the focus on growing the Bath and Body category and shifting our product and price architecture
to appeal to a wider customer cohort, we have been able to maintain our ATV broadly in line with
the prior year.
Our non-member ATV was $45 and highlights the great value proposition and appeal that dusk maintains in the market.
In 1H FY25, Inventory of $14.4m was -$3.2m lower vs pcp reflecting strong sell through and
much improved productivity. Inventory remains clean and well balanced.
The Board has declared a fully franked interim dividend of 5 cents per share, and a fully franked
special dividend of 5 cents per share, bringing total dividends for 1H FY25 to 10.0 cps.
The record date is 12 March 2025 with a payment date of 26 March 2025.
dusk is in a strong financial position with no debt, which provides flexibility to pursue future
growth opportunities as they emerge or implement further capital management initiatives.
4 Dusk Rewards is a two-year paid membership Loyalty Program
Trading Update & 2H FY25 Outlook
The sales results for the first eight weeks of 2H FY25 as summarised in the table below. For the
first 8 weeks of 2H FY25, our trading margin5 remains in line with the prior year.
Table 1: Trading Update
We are encouraged by the continued growth that we are seeing early in 2H FY25.
Our sales rate has improved through the first 8 weeks with February 2025 sales up +6.4% vs pcp
and +8.8% LFL.
We will continue to expand our Bath and Body category growth in 2HFY25 and as part of this we
have launched our first collaboration of the calendar year, with the White Lotus x dusk product
range. This product range emphasises quality, superior fragrance and leans into wellness and spa
as sub-categories.
We are optimistic about the upcoming events with Easter and Mother’s Day trade just around the
corner. Our product range has been amplified with a new look and feel, on trend fragrances and a
price competitive range.
In 2H FY25, we expect to open one store and close two stores by the end of FY25.
Our hedging policy continues to mitigate FX risk in 2H FY25

i hold DSK

am starting to regret i didn't get in earlier here

I have no idea how this works, fraud??!!
It makes no sense, undifferentiated product, sold in a shop where you can buy the same thing at a fraction of the cost in the same shopping centre. (or from a party plan seller). They buy cheap chinese junk and mark it up to the sky, why does anyone buy it from them specifically?

I have never understood any success they have had! Wouldn't be game to own because I would be terrified the whole house of cards will just fall over one day.

Well dont to those that understand it and have held thru the ups and downs!

galumay said:

I have no idea how this works, fraud??!!
It makes no sense, undifferentiated product, sold in a shop where you can buy the same thing at a fraction of the cost in the same shopping centre. (or from a party plan seller). They buy cheap chinese junk and mark it up to the sky, why does anyone buy it from them specifically?

I have never understood any success they have had! Wouldn't be game to own because I would be terrified the whole house of cards will just fall over one day.

Well dont to those that understand it and have held thru the ups and downs!

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well several times i looked at this before i finally bought in , and though hmmm another retailer ( and retail is allegedly dead ) i have plenty of them ( 4 motor dealers , HVN , SUL , AX1, JYC , KGN , TRS etc etc ) and moved on

but what finally got me was the profit margin when other retail was starting to worry

i am guessing they used the old Myer trick , a loyalty/club plan to keep them coming back

i am up 81% on these since buying in May last year

like several of my winners i never understand what the punters see in the company , but i just wait for the share price to keep rising and then take the cash invested out ( and put them in the bottom drawer )

i learned from the inherited estate NEVER be overly greedy ( and keep an original 'infamous ' Poseidon Nickel certificate , laminated to remind me of just that ) and it MIGHT be worth double the value of the entire inherited share portfolio , just in the times i have been reminded to TAKE THE CASH RISK OUT of the holding , in a timely manner