Ann: Nick Scali Ltd FY17 - Appendix 4E, page-6

That's very true Travelightor regarding the company needing to be at the forefront of furniture design to keep attracting customers. So far so good. Obviously any slip-ups can prove harmful for sales and even more disastrous for profitability (Adairs is a case in point) due to the fixed cost aspect of the business - as explained and emphasised by Madamswer.

A few point from the teleconference of interest for those who couldn't listen in:
♦ The biggest lever on the cost side of things are the distribution centres in each of the states which can handle the flow through of more goods.
♦ If the $A remains higher, benefits of lower product cost will be reinvested in to lower prices to drive volume growth.
♦ No decision has been made as to the future of Sofas2Go, it's still under review.
♦ 7 of the 10 planned new stores in FY2018 will be former Master sites. The company described the opportunity as a good one, due to 'very favourable' rental expenses, and the ability to utilise the existing network infrastructure for transport / distribution.
♦ The MD knows the UK market well and if an acquisition were to be made, likely it would be in that market.
♦ The NZ market is characterised by small operators and much less competition. NCK is very bullish on their offering in this market. (This surprised me coming from a company known for more sober and dour commentary). Though it was mentioned that suitable properties in the NZ cities are hard to come by.

I must say how amusing it is to see the market's negativity to today's results. One slow month (July) is being projected to be many slow months, or years ahead (even though June orders were very strong meaning the start of FY2018 will likely see solid revenue growth). But who knows, maybe we are in for an extended slowdown - that's just the nature of the retail and we are well overdue. Notwithstanding the company is in good shape and really managed to navigate more leaner times.