RBA Rate Hike Puts Nick Scali Sales Under Pressure

Nick Scali, an Australian furniture retailer listed on the ASX under ticker NCK, faces a tougher stretch ahead as the Reserve Bank of Australia (RBA) raised interest rates for the fourth time this year. The rate hike puts pressure on big-ticket spending, including furniture purchases, which families can often delay or postpone when mortgage repayments increase.

Nick Scali's profit grew strongly in its latest year due to wider gross margins and an improving British business. However, the company's written sales orders at home were steady in early trading, while Britain recorded another strong lift.

The RBA linked this week's rate rise to sticky inflation, with August inflation figures showing headline inflation accelerating. Consumer spending was flat in August, and unemployment has climbed to its highest level in several years.