Nick Scali tumbles on profit warning

By the Editorial Team · Friday, October 23, 2026

Australian furniture retailer Nick Scali slashed its profit forecast after reporting a 15 percent drop in first-quarter sales orders and declining store traffic due partly to a cyberattack and weak consumer demand. The profit downgrade signaled broader challenges for discretionary retailers amid rising costs and economic pressures, prompting a sharp 15.3 percent fall in Nick Scali’s shares and declines across other major retailers.

Shares in Australian furniture retailer Nick Scali fell sharply on Thursday following the company’s profit warning, signalling a challenging outlook for discretionary retailers amid a difficult economic environment. The company reported a significant sales decline for the first quarter of its 2027 fiscal year, with written orders dropping 15 percent and store traffic declining around 10 percent in Australia and New Zealand. This contrasts with 11 percent growth in sales orders during the same period last year.

Nick Scali attributed part of the downturn to a cyberattack that temporarily disrupted its order processing system, further compounding sales pressures. The company, operating 132 stores with 114 located across Australia and New Zealand, now expects first-half revenue in these markets to fall between 11 and 14 percent compared to the previous year. However, its UK business showed positive momentum, with first-quarter orders up 29 percent year-on-year and like-for-like orders increasing 14 percent.

The retailer revised its projected first-half profit range to AUD 28 million to AUD 32 million, significantly below the AUD 44 million reported for the same period in 2026 and approximately 20 percent below analysts’ market expectations. This downgrade triggered an immediate investor sell-off, with shares opening 23 percent lower at AUD 10.93 and closing the day down 15.3 percent at AUD 12.03. Over the past year, Nick Scali’s stock has dropped more than 50 percent from its peak.

The profit warning follows warnings from the company's executive chairman, Anthony Scali, who in August described consumer conditions as “terrible,” with declining house prices impacting foot traffic and sales. The current headwinds include rising interest rates, inflationary pressures, and increased fuel costs, all of which have dampened demand for discretionary goods ahead of the crucial Christmas trading period.

The fallout from Nick Scali’s update extended to other retailers, with share prices for Harvey Norman, JB Hi-Fi, and Wesfarmers falling about 2 percent, while Adairs declined 4 percent and online furniture retailer Temple & Webster dropped nearly 9 percent.

Financial analysts expressed growing concern over the outlook for retail spending. Citi analyst Sam Teeger noted the sharp reversal from relatively flat order growth in the initial weeks of the fiscal year to a marked 15 percent decline over the quarter. He flagged the possibility of further Reserve Bank of Australia interest rate hikes in November and cautioned that the retail sector’s challenges might persist longer than expected.

Macquarie analysts acknowledged Nick Scali’s strong brand position but emphasized the need for improved macroeconomic conditions to support future growth. Upcoming trading updates from major retailers such as Woolworths, Coles, JB Hi-Fi, Endeavour, and Wesfarmers will be closely watched for signs of consumer spending resilience amid these ongoing pressures.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.