The Shaver Shop Group Ltd (ASX: SSG) is positioning itself to deliver an impressive 10% dividend yield in the upcoming financial year. The retailer, specializing in personal grooming products for both men and women, has been a reliable option for passive income over the past several years. With a commitment to maintaining a strong dividend record, the company aims to solidify its status as a leader in the hair removal market.
Shaver Shop offers a variety of products, including electric shavers, clippers, trimmers, and wet shave items. As of now, there are 124 stores located throughout Australia and New Zealand. Additionally, the company operates online platforms in both countries and is active on major e-commerce sites such as eBay, Amazon, and TradeMe. This extensive presence enables Shaver Shop to negotiate exclusive products with suppliers and diversify its offerings across categories including oral care, hair care, and beauty products.
Dividend Growth and Financial Performance
Shaver Shop has demonstrated a strong commitment to returning value to its shareholders. The company has raised its annual dividend per share almost every year since 2017. Although it maintained the same dividend for 2024, it increased the payout in FY25 to 10.3 cents per share. At the current share price, this translates to a grossed-up dividend yield of 10.3%, inclusive of franking credits.
This potential for passive income is particularly appealing as it could match or exceed returns from the S&P/ASX 200 Index (ASX: XJO). Analysts believe there is significant room for growth, projecting that the annual payout could rise to at least 10.4 cents per share by FY26. This optimism is bolstered by the company’s earnings per share (EPS) of 11.5 cents in FY25, along with a cash EPS of 12.1 cents.
Positive Sales Trends and Future Outlook
In the early weeks of FY26, Shaver Shop reported a total sales growth of 2.7%, with like-for-like sales growth reaching 1.5%. Such growth is critical, as it directly impacts net profit. Moreover, the company noted an increase in its gross profit margin compared to the same period in FY25, driven in part by the success of its private brand, Transform-U, which is currently being expanded.
The retailer is also focused on expanding its physical footprint. Shaver Shop plans to open two new stores in the first half of FY26, with additional locations slated for the second half. Alongside new store openings, the company intends to refit and relocate some existing stores to optimize operations.
Overall, the outlook for Shaver Shop Group remains strong, with positive prospects for both profit and dividend growth in the coming years. Investors seeking steady returns may find this ASX-listed company an attractive option as it continues to adapt and expand in the competitive personal grooming market.
For potential investors, it is essential to consider broader market conditions and individual financial goals before making investment decisions. As always, comprehensive research and consultation with financial advisors are recommended.
