Nick Scali is currently grappling with significant freight delays following the administration of its freight forwarder, Lion Global Forwarding.

As a result of this collapse, the furniture retailer has reported substantial delays in container deliveries.

These disruptions pose risks to Nick Scali's ability to meet its net profit guidance of $30 million to $33 million for the first half of the financial year.

The company anticipates incurring unexpected additional storage and detention costs due to these delays, although these costs remain unquantified.

Currently, approximately 200 containers are held at ports, with another 300 containers still en route.

In response to the container delays, Nick Scali has applied to the Federal Court of Australia for orders to compel shipping lines to release its containers.

The Court has granted these orders, enabling Nick Scali to expedite the delivery of containers to its distribution centers.

At the annual general meeting in October 2024, Managing Director Anthony Scali noted that rising freight rates could negatively impact the company's gross profit margin.

Earlier in October 2024, CEO Anthony Scali had already indicated that increasing freight costs were adversely affecting profit margins.

Additionally, Nick Scali reported a decline in FY24 net profit after tax to $80.6 million, a 20.3% decrease from $101 million in FY23, alongside a 7.8% drop in sales revenue to $468.2 million.