Earnings Update: Universal Store Holdings Limited (ASX:UNI) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Universal Store Holdings Limited (ASX:UNI) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The result was positive overall - although revenues of AU$208m were in line with what the analysts predicted, Universal Store Holdings surprised by delivering a statutory profit of AU$0.29 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Universal Store Holdings

Following the latest results, Universal Store Holdings' eight analysts are now forecasting revenues of AU$243.5m in 2023. This would be a meaningful 17% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 28% to AU$0.36. Before this earnings report, the analysts had been forecasting revenues of AU$243.2m and earnings per share (EPS) of AU$0.36 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of AU$5.68, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Universal Store Holdings, with the most bullish analyst valuing it at AU$7.30 and the most bearish at AU$3.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Universal Store Holdings' growth to accelerate, with the forecast 17% annualised growth to the end of 2023 ranking favourably alongside historical growth of 13% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Universal Store Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Universal Store Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Universal Store Holdings going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Universal Store Holdings that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.