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The earnings performance of youth fashion retailer Universal Store Holdings (ASX: UNI) has accelerated in the second half with the company today issuing full-year guidance of $368 million to $375 million in sales for FY26 with the high end of the range representing a 12.6 per cent increase from a year earlier.
However, the bottom-line result will be impacted by a non-cash impairment of around $24 million against intangible assets in its CTC streetwear brand.
Universal Store has forecast underlying EBITDA of $61.5 million to $64.5 million for FY26, or growth of about 11.5 per cent and 15.4 per cent respectively on the prior year.
The trading update issued today reveals an accelerated sales performance for the group over the past six months.
Group retail sales grew 14 per cent over the first 43 weeks of FY26, with the company's flagship Universal Store banner delivering like-for-like sales growth of 8.5 per cent while cycling a strong 13.7 per cent comparable period.
Universal Store achieved 8.1 per cent like-for-like growth across its 87-store network in the first 17 weeks of the second half, which is up from 7.1 per cent in the first seven weeks of the half.
Perfect Stranger, the group's fast-growing womenswear concept, posted total sales growth of 39.8 per cent and like-for-like growth of 12.9 per cent over the 43-week period.
Like-for-like growth in the first 17 weeks of the second half of FY26 was 10 per cent, up from 4.9 per cent in the first seven weeks of the half.
There are 26 Perfect Stranger stores as part of a Universal Store group network that has expanded to 121 locations.
CTC total sales grew 14.5 per cent, but the company says structural deterioration in its wholesale channel have prompted the impairment charge.
The company says the deterioration of CTC’s wholesale channel continued in the second half with the closure of key third-party customer retail stores and reduced intercompany sales to Universal Store.
"The company views the challenges in the wholesale channel as structural and unlikely to improve in the near term," says Universal Store in today's ASX announcement.
CTC's online sales fell 10 per cent year-to-date, and the wholesale business now accounts for less than 5 per cent of group sales.
“The group’s year-to-date performance is very pleasing given current geopolitical and economic uncertainties," says Universal Store CEO Alice Barber.
"Despite these macro-economic conditions, we have not seen a material shift in sales trends across the group in this period.”
The update builds on a strong first half in which Universal Store reported underlying EBIT of $43.6 million, up 23.2 per cent, and underlying net profit after tax of $28.3 million, up 22 per cent.
The company operates 87 Universal Store locations alongside its 26 Perfect Stranger stores and additional CTC sites, targeting 16-to-35-year-old customers with a curated mix of third-party and owned brands spanning apparel, footwear and accessories.
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