Ann: Macquarie Conference Investor Presentation, page-16

"If so, it's trading on a PE of 7.4 so what am I missing? Is it the expected slowdown in the economy and so the market expects things to get worse over the next couple of years?"

This is what appears to be getting priced in. Consumer induced slowdown, less spare ash due to rising domestic interest rates.
China factory closures is causing severe delays on some order which may cause some consumers to ask for refunds.
None of this has showed up in the ABS stats yet, retail stats that is.

7% dividend and 60% gross margins then a P/E of somewhere in the 7-12 range depending on where FY 22 earnings land.
When everything going wrong is priced into the business and the business itself seems to be performing well, some possible earning slow down granted could eventuate. That is the time to buy for me.
Rather than when market is pricing in the fact that everything is going great and will be that way forever.
I do think given central banks are not going to jump into any recessions with near unlimited stimulus like the last few does mean if we get a recession it will be a more typical 12-18 months economic/demand induced contraction. So I wouldn't buy Nick Scali today unless I could guarantee I can hold them for 12 months at least.
I realised ive given forecasts surrounding timelines and recessions, I am the first person to say, never listens to someone else's forecasts.......they tell you more about the forecaster than the future as Buffett says.