Many ASX retail stocks beat the expectation of analysts with higher sales and improved margins in spite of the subdued economy. The lowered interest rates boosting household spending was the catalyst evoking further interest in these stocks.
Harvey Norman Holdings Limited (ASX: HVN)
posted a strong performance in FY2025. Its consolidated revenue went up by 8.6% to A$4.47 billion. Aggregated franchisee sales were $6.43 billion, a rise of 6.1% and company operated sales came in at A$2.92 billion. PBT jumped 39% to A$753.1 million, while NPAT went up 47% to A$518 million. EBITDA improved by 25.3% to $1.13 billion and EBIT was up 33.4% to A$871 million. Operating cash flow remained solid at A$694.3 million with cash conversion of 95.1%. Net assets increased to A$4.84 billion, up 6.8%, and total assets went over A$8.37 billion. The dividend per share for FY2025 was 26.5c compared to 22c last year. The company also kept expanding globally with 121 stores overseas and its first UK flagship store opened at Merry Hill. Property portfolio is now valued at A$4.53 billion and it is pushing AI related product categories. Going forward Harvey Norman plans to grow its franchise network, add more overseas stores including projects in UK and East Zagreb, and integrate more AI into retail operations. The strong balance sheet and property based model is expected to support these moves.
Temple & Webster Group Limited (ASX: TPW)
reported its best ever results in FY2025, with revenue going up 21% to around A$601 million. This growth came from strong end of financial year sales and more market share, which now stands at 2.7% in the Australian furniture and homewares sector. EBITDA was up 43% to A$18.8 million and margins also improved to 3.1%. Adjusted EBITDA went up 40% reaching $23.7 million. FCF jumped by almost 90% to A$38 million helped by tighter cost control and lower fixed costs, which dropped to 10.6% of revenue compared to 11.3% last year. The company still has no debt and closed the year with A$144 million cash. Customers grew 16% to 1.77 million, total orders also rose 16% and average revenue per customer stayed same at A$456. Exclusive products made up 45% of sales, home improvement sales rose 43% to A$42 million and trade & commercial revenue was A$48 million.it is sticking to the mid term target of more than A$1 billion revenue and expects EBITDA margins between 3–5% in FY2026. Long term margins above 15% are also a goal, with focus on operating leverage, brand spending and AI efficiency.
Light & Wonder, Inc (ASX: LNW)
delivered stable Q2 FY2025 results. The company reported total revenue of U$809 million which was down 1% compared to last year. Out of this, U$528 million came from Gaming, U$200 million from SciPlay and U$81 million from iGaming. Operating Income went up to U$202 million which is a 15% increase, while Adjusted EBITDA rose 7% to U$352 million. Net income improved 16% YoY to U$95 million which translated into diluted EPS of U$1.11.For the first half of FY2025, revenue stood at U$1.58 billion which is 0.4% higher than last year. Net income came at U$177 million up 8% and FCF from operations was U$291 million. On the balance sheet side, the company had U$136 million cash and U$4.82 billion of long term debt. Total assets were U$6.49 billion. One of the main highlights was the U$850 million acquisition of Grover Charitable Gaming along with contingent payments up to U$200 million. Going forward, the company expects further margin expansion supported by operating leverage, cost synergies from Grover and growth in both digital and gaming business. The management also aims to deleverage while using its strong content pipeline to boost results.
(Source: Company Announcements)
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