We discussed NCK las month after a soft January update saw the stock slide lower – Here. The update raised concerns about slowing discretionary demand, despite a better-than-expected 1H result. The market is focused on weaker forward sales, with modest growth suggesting the 2H26 order book may miss expectations as higher rates and demand pull-forward weigh on the shares/sector.
In our view, this was far from a result that justified such an aggressive rerating, with Australia/NZ revenue still up +13.1% and the UK business showing strong momentum, nearing breakeven as scale builds. Discretionary retail remains out of favour amid rising rates and recent weak updates, but this negative sentiment is creating opportunities to accumulate quality names like NCK and JB Hi-Fi at more compelling levels.
- We added to NCK ~$16 this week, seeing excellent value in the retailer at current levels – MM owns NCK in its Emerging Companies Portfolio.
MM is bullish toward NCK around $16
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