Hey, good morning, ladies and gentlemen. It's great to be here today, and thanks for joining us. In terms of the agenda, I'll share some of the highlights from the last 12 months before handing over to Larry, who will take you through the financials. From there, I'll speak to our 2023 priorities before finishing off with our trading update and our outlook. Let's get straight into the financial highlights on slide four. Sales increased 4.2% to AUD 222.7 million. This is a really exceptional result, considering almost half of our store network was closed for three months during the government-mandated lockdowns across New South Wales, Victoria, ACT in quarter one and quarter two of last year.
The uplift in sales was driven by like-for-like sales growth of 3.5%, including online sales growth of 23.7%. Online sales represented 34% of total sales for the year or approximately AUD 76 million, our highest percentage and nominal sales result for this channel in the company's history. In the second half of the year, we saw in-store sales driving overall sales growth as customers increasingly return to their traditional shopping habits, something we and our store teams are really excited by. In-store is where our business really shines and we differentiate ourselves. Moving below the top line, gross profit margins were robust at 43.9%, only 40 basis points lower than our record-achieving gross profit margin last year.
This exceptional result, together with ongoing cost control, led to us delivering an NPAT result of AUD 16.7 million, which is at the top end of our guidance range of AUD 16.25 million-AUD 16.75 million that we announced in June of this year. Whilst this is down 4.5% on last year's record net profit result, we see it as an exceptional outcome given we lost 14% of available in-store trading days due to government-mandated lockdowns across the year. With a strong profit result, basic earnings per share was AUD 0.132 and cash EPS was AUD 0.142, both well up on pre-COVID levels.
From a balance sheet perspective, we remain in a very strong position with net cash of AUD 9.4 million an the end of the financial year after injecting an additional AUD 4 million into stock and returning AUD 11.8 million to shareholders by way of fully franked dividends. Our strong cash flow, trading performance and financial position has led the board to declare a AUD 0.055 per share fully franked dividend. This brings our total dividends to AUD 0.10 for the year, up 22%, and at the current share price represents a pretty attractive dividend yield for shareholders. Our strong net profit and ongoing focus on capital management has also led us to deliver a return on capital employed of 32.9% for the year. Another achievement we are very proud of.
Moving on to our operational highlights on slide five. Our business strategy has always and will continue to be centered around delighting our customers. Our most important measure of success is our customer satisfaction score, because this is a leading indicator of almost everything else. Now pleasingly, our NPS score, the fairly universal measure of customer satisfaction, remains at world-class levels of around 88-89 out of 100. This is despite some pretty challenging and stressful circumstances for the store teams over the last 24 months. One of our key competitive advantages is the product knowledge of our store teams. Now in comparison to some other retailers that may see personal care and grooming as a complementary range to their core offering, we live and breathe these categories. Our training of our store teams is absolutely critical to delivering the service outcomes we and our customers expect.
Really exciting to see the spirit of our teams and their passion for the business shine through over the face-to-face trainings that have recently returned after a 24-month hiatus. Online training modules, in fairness, are just not the same as training our teams face-to-face. Moving on to our omnichannel highlights. When I look back at the last three years, one of the biggest factors that enabled Shaver Shop to go from strength to strength has been the success of our multichannel approach. We fulfilled more than 630,000 online orders from our stores and warehouse last year. That's more than 17,000 packages per day on average across the network, and almost 97% of these online orders were fulfilled and ready for courier collection within 24 hours of the order being placed by the customer.
Whether our stores were open, closed, or just fulfilling online orders, we were able to continue to meet consumer demand and adapt to our customers' shopping requirements. Now, even though we've seen an increase in foot traffic and in-store sales in the last six-month period, foot traffic at store level even now remains well below COVID levels. That said, our frontline store teams are doing an incredible job in servicing and converting customers when they do come into our shops. In the categories we sell, the desire for customers to touch and feel the product and talk to product experts is evident because more than three-quarters of our sales are now being generated through our stores again. That's not to say we won't continue to invest in our online channel and build its capabilities.
The customer's preferences are an important factor to consider when looking at the various options, investment options we have in front of us at any point in time. The passion of our store teams is also evident by a record engagement score of 91.2% in FY2022, despite the disruption and the angst caused by the pandemic. As you can probably tell from what I've said so far, I'm extremely proud of our store teams and the way they've represented themselves and the Shaver Shop brand through the pandemic. I wouldn't be speaking to these incredible results without this team's passion, focus, and dedication to the business as well as the values we all share. I'd like to thank them publicly on behalf of the board and our shareholders for being the fundamental driver of the business's performance as well as our strong brand recognition.
Okay, now that we've been through the highlights, let's provide a little bit more context about how the results were achieved by looking at the top-line results on a quarterly basis. Quarter one was especially challenging. In addition to cycling the exceptional results from quarter one 2020, when sales of hair clippers skyrocketed, we're also faced with long-term lockdowns across New South Wales, Victoria, and the ACT, with snap lockdowns also occurring in other states. Quarter two started really well as New South Wales reopened in mid-October and Victoria reopened later in the month. The trading strength continued right through to Black Friday, but slowed abruptly in mid-December with the Omicron outbreak. From the excitement of Black Friday and the promise of having a really strong Christmas, what ended up being quite disappointing end to the first half.
Quarter two was quite a frustrating quarter, even though sales did grow strongly, up 8% on the prior period. Quarter three started softly as Omicron fears continued to impact foot traffic in stores, but started to gain momentum slowly in February, March, leading to sales growth of 4.0% for the quarter. This momentum led us to a terrific quarter four, which felt much more like normal as in-store sales growth, strong total sales growth of 8.3% despite decline of the online sales. Pleasingly, as I'll get to later, that strength has continued into the first seven weeks of the new financial year, albeit we are currently comping the store closure periods from last year. Getting a good guide or trend is quite difficult at this point in time.
To give additional context of the quality of the quarterly trading results for FY2022, let's compare back to our pre-COVID performance in FY2019. Total sales for the year were up 33.0%, with the growth remaining very consistent across each quarter. This is reflected in the table in the bottom right of the slide in the last column. You can see how consistently strong our performance was despite the volatility of the market and operating challenges we faced over the 12-month period. The change in the way shoppers chose to shop with us over the last 12 months through FY22 is clearly evident on slide seven.
From the lockdowns in the first quarter, where the majority of our sales were generated online, to the last quarter where online sales reverted to around 22% of sales, you really can see the benefits of our multi-channel retail model on this slide. Now to be clear, online sales don't just come from our website. We also partner with the following online marketplaces: eBay, Trade Me, MyDeal, as well as with Amazon. We've specifically chosen to work with these partners and provide them with a specially curated range of products. We see these relationships as providing an important way for Shaver Shop to build upon our brand awareness with sales that do not overtly cannibalize our fully owned and operated sales channels. The key takeaway from this slide is something I've said before.
As a true multi-channel retailer and market leader in our categories, we are genuinely happy for customers to shop online, in stores or both. Our multi-channel model has been designed to cater for this while still providing an excellent customer experience and delivering strong returns to the business. Slide eight shows the growth of our online business over the past five years. In 2022, online sales increased to AUD 75.7 million, up 23.7%, and represented another incredible result for the business. You can see in the middle graph of this slide that online sales as a percentage of total sales has also increased materially over the last five years, sitting at 34.0% for FY2022. Now that's up from 10.2% in 2018.
Finally, in the far right of the slide, the options for delivery have expanded with customers now also choosing priority delivery, something we only rolled out late in the third quarter with DoorDash, in addition to our standard, express, same-day, and of course, Click and Collect fulfillment options. We are continually looking at and experimenting with ways of optimizing delivery charges to provide strong value for money for our customers while also balancing delivery charges, as these now represent a significant operating cost for the business. Slide nine really does speak about the strong performance of the business and our omnichannel model. Our NPS scores, as I mentioned before, remained at world-class level in FY 2022, averaging 88.4 out of 100. That's up from the 79.4 result we achieved in 2018.
With foot traffic lower than pre-COVID levels, our store teams did an outstanding job of selling to the customers that did enter our shops, with 42% of those customers that entered our shops choosing to make a purchase. Lastly, while our in-store sales were down AUD 5.4 million on last year, this is entirely due to the loss of 6,200 in-store trading days, around 14% of available in-store trading days throughout the year due to government-imposed lockdowns. Within that context, it's actually a very strong result. Let's now talk a bit about our products and our categories. In addition to the service we provide, our product range also significantly differentiates Shaver Shop from its competitors. We have a broader and deeper range of personal care and grooming appliances than any other retailer, online or offline in the Australian marketplace.
Now, why is our range so differentiated? Well, pretty simply, it's because we work with our suppliers to secure exclusive access to the latest product innovations that they bring to the market. Our exclusive product range is something we've worked to build for many years with our supplier partners and now represents more than 50% of our total sales and almost 60% of our total gross profit. The obvious question is, why do these global suppliers entrust Shaver Shop with their key global product launches? Again, very simply, it's because we've proven we are the best at explaining the products and features of these new product innovations to customers. Why, for example, a AUD 499 men's shaver that effectively looks the same as a AUD 299 shaver will better meet the consumer needs.
That means per capita Shaver Shop sells more of the higher price, higher margin products to suppliers than our competitors do. Importantly, we've proven that we can sell more than just exclusive product lines. We are the market leaders in many categories and products. We are one of the market leaders with GHD hairstyling products, electric toothbrushes, and DIY massage guns. Now on to slide 11. The contribution of exclusive products and our decision to moderate discounting of these lines is a key reason why our gross profit margins remain elevated in FY2022 at 43.9%. From a category perspective, haircutting, our highest margin category, continued to be the largest sales contributor at 34% of total sales. Long-term hair removal and massage also grew share last year.
Pleasingly, as we predicted around 12 months ago, Men's Shavers softened during the lockdowns, but over the last six months we've seen a strong rebound in this category as people return to work and office settings and choose to be clean shaven. That is combined with beard trimmer sales remaining very strong, which is in a great position to be in. Two of our largest categories, which we have above company average margins, delivering significant sales growth at the same time. We think there's more room to run in these categories looking forward into FY2023. I hope that's given everyone a bit more context around the business performance over the last 12 months. I'll now hand over to Larry to run through the financial results in more detail.
Thanks, Cameron. As previously mentioned, total sales were up 4.2% year-on-year, despite us losing 14% of available in-store trading days to government-mandated lockdowns. We delivered 3.5% like-for-like sales growth, which was supported by an uplift of 23.7% in online sales. Importantly, like-for-like sales growth is a difficult measure to get a real bearing on this year because last year when our stores were closed, we reallocated a significant proportion of our online sales to the stores that remained open, and as a result, sales of those stores were higher last year. Getting a true like-for-like comparison year-over-year is quite difficult. In addition to this, the full year contribution from the last six franchises we bought back in February 2021 also contributed to the overall top line growth.
When open, these stores performed to expectation and have been a great addition to the corporate store network. Gross profit margins remained strong in 2022, coming in at 43.9%. As Cameron said, hair clippers and beard trimmers were strong performers in the haircutting category, with a significant proportion of these sales coming from exclusive product lines, like the new Wahl Waterproof Stainless Steel beard trimmer. While our stainless steel range has been a very strong performer for many years, as many of you will know, the new waterproof version, launched almost 12 months ago, now offers customers the ability to use that product in the shower as well as outside it. As Cameron mentioned, we've also taken a more disciplined approach to pricing our exclusive products when on promotion to maximize profitability.
We'll continue to try to optimize and balance the price-volume equation going forward by using the learnings we've taken over the last 24 months. Cost of doing business increased AUD 2.3 million on a nominal basis or 4.1%, but remained relatively flat as a percentage of sales at 25.8%. I'll talk a bit more about this on the next slide. This led to net profit after tax being AUD 16.7 million, the second highest result in our 36-year history, and at the top end of our guidance range. This also led to earnings per share of AUD 0.132, cash EPS, which reflects the benefit of the tax deduction we receive on franchise buybacks of AUD 0.142.
Overall, a really pleasing set of results, with the second half of the year delivering the highest second half profit on record for the company. Our half yearly P&L results over the last 5 years has been included in the appendices to this presentation, should you wish to look at them. Moving on to slide 14 and a more in-depth analysis of our cost of doing business. Employment costs represent Shaver Shop's largest operating expense at AUD 32 million. In the graph on the right of the slide, you can see that in 2022, these costs as a percentage of sales reduced 70 basis points to 14.3%. This is due to these costs on a nominal basis, staying relatively flat at around AUD 32 million with the prior year, despite Shaver Shop having six more stores in the network at the end of the year.
So why is this? It's entirely due to the store lockdowns in the first half of 2022, when we mitigated as far as possible the lost sales and gross profit from stores being in lockdown. We did this by aggressively reducing roster costs where possible. Given that almost half the network was closed to customers for almost a quarter year, roster costs were reduced by over AUD 2 million in this period. A decision we did not take lightly given the impact this has on our store teams and their families. In addition to lower operating costs, we were able to negotiate rent abatements again with many landlords, amounting to about AUD 600 thousand. These one-off benefits to our cost base, being the lower employment costs and rent abatements, are not expected in the future.
Equally, we would also expect sales and gross profit to improve in FY2023, all else being equal, given the stores should not be closed again in the future. Touch wood. Operational expenses, which are primarily the variable costs required to operate a store, are shown in the second to top bar in the graph. These costs increased 40 basis points to 5% on the back of higher postage costs to match it with the increase in online sales, as well as due to higher merchant fees. Finally, we've been able to continue to drive operating leverage across our corporate overhead costs, as represented by other expenses, reducing to 1.4% of sales or down 30 basis points. Overall cost of doing business in 2022 remained flat with 2021 at 25.8% of sales, a very pleasing result.
Slide 15 puts into context the strength of our business performance over the last five years. Our net profit has more than doubled from AUD 7.2 million in 2018 to AUD 16.7 million this year. Of course, we've launched new stores, built out our digital channel, and acquired the remaining franchises over this time. This use of capital has driven incremental profit as well as incremental returns for shareholders. In terms of earnings per share, our basic EPS has increased from 5.8 cents in 2018 to 13.2 cents this financial year, and cash EPS has increased from 7.3 cents in 2018 to 14.2 cents this year. Overall, a very positive trend in net profit and earnings per share. Moving on to slide 16.
From a balance sheet perspective, Shaver Shop remains very well-placed with net cash at 30 June 2022 of AUD 9.4 million. Net cash is up AUD 2 million on the AUD 7.4 million net cash balance at the end of last financial year. As we foreshadowed over the last couple of years, we increased our stock position to more normal levels by the end of 2022. The last two year-ends have been characterized by high risks of store closures due to the pandemic. As a result, we have deliberately reduced our stock investment to protect working capital and our liquidity. Now that stores are back open and expected to remain open, and customers are increasingly returning to stores, we chose to return stock to more traditional levels, with average stock per store being AUD 183,000 at 30 June 2022.
Importantly, though, this is still well below pre-COVID levels. I think 2019 it was up above 200,000 per store. There weren't any other material changes in asset or liability balances, with small movements more driven by the addition of stores or the completion of full store refits and relocations. We ended the year with net assets of AUD 78.6 million, an important metric when analyzing our return on capital, and I'll talk a little bit more about that on the next few slides. Moving on to our cash flow statement on slide 17. Shaver Shop has always generated strong operating cash flow, and 2022 was no exception, with AUD 28.3 million generated during the year.
As noted on the last slide, we invested AUD 4 million in additional stock, which was the primary driver in working capital, increasing AUD 3.4 million, an outflow of cash. Total CapEx after landlord contributions for new and relocated stores amounts to AUD 1.5 million, and we returned AUD 11.8 million to shareholders by way of fully franked dividends. The net result of all this, as I mentioned on the last slide, is our cash balance increasing AUD 2 million to AUD 9.4 million. We've been asked by some shareholders about the board's intentions on how best to utilize this cash balance. At present, the board's intention, while it is still paying fully franked dividends, is to continue to increase the dividend payout each year, subject to there not being a more attractive use of that capital.
There is also a preference to retain a higher degree of fiscal conservatism over the next 12 months given the softening macroeconomic environment we're currently in. Which takes us on to slide 18 and our dividend payout trajectory. As Cameron said, today the board announced a AUD 0.055 fully franked final dividend, which brings total dividends to 2022 to an even AUD 0.10 per share, fully franked, up 22% year-over-year. This represents a payment of approximately 70% of our cash NPAT or the midpoint of our dividend policy, which is to pay out approximately 60%-80% of cash NPAT. When it comes to our use of capital, we generated an attractive return on capital employed of 32.9% while maintaining a prudent financial position.
Return on capital employed is another metric we are very proud of and focused on maintaining. That concludes the financial review. I'd like to take the opportunity to thank our shareholders and customers for your ongoing support, and I'll now hand you back to Cameron, who'll talk through our 2023 priorities.
Now, thank you, Larry. Now, we've continued to work really hard through the pandemic to continue expanding our product range and its relevance. We've added additional fragrance lines. We've added new brands to our massage range, with Therabody coming in, and we've expanded into salon-quality shampoos, conditioners, and associated haircare products for men and for women. We have secured some really exciting additional brands for our female customers that will be launched in the first half of this financial year, well and truly in time for Christmas. I look forward to speaking about these closer to the launch. I mentioned this earlier, but it's just so important to our business model, so I'm gonna revisit it again. We return to face-to-face staff training with state-based sessions held in July of this year, and we will continue to invest in these areas in the lead-up to Christmas.
This is so important to ensuring our store teams are able to continue to provide excellent customer service in store and build long-term brand loyalty. As indicated over the last few presentations, now that international travel to New Zealand is back on, we're looking to add new stores there to build brand awareness and economies of scale in this region. We think there's scope to add six to seven new stores across New Zealand, provided of course the commercial stack up. What's perhaps not fully appreciated by the market and our customers is that many of the products we sell offer very cost-effective alternatives to going to the hair salon, barber, laser hair removal clinics, and massage therapists.
This is part of why we feel our business is quite resilient during economic slowdowns, as well as the fact that people tend to prioritize their health and well-being versus more luxury-type purchases. In any event, we want to ensure the cost-effective nature of our products is more prominently featured in our marketing collateral. We'll continue to improve our social media presence, something that I personally feel like probably about a five out of 10, and something that has significant potential, particularly through leveraging our store teams. Finally, as we've done in the past, we'll continue to be agile in managing our business so that we deliver the strongest possible financial result for our shareholders without taking undue risk. This takes me to our trading update on slide 22.
Total sales growth over the first seven weeks of 2023, of slide 23, is up 19.2% and 6.3% over 2021. Remembering that two years ago we had an exceptionally strong start to the year, with sales of hair clippers in particular flying off our shelves at an unprecedented rate. In comparison to pre-pandemic levels, sales are up 35.6% across our first seven weeks or so. In-store sales have been very strong, up 82.7% on last year, 18.3% on two years ago, and 20.5% versus the pre-pandemic results in FY 2020. This has more than offset the decline in online sales versus the pandemic-affected periods in FY 2022 and FY 2021.
This decline was always expected to occur given our store network is now fully open again and customers have once again shifted back towards in-person shopping. The exceptional growth rates in store reflect the fact that customers generally like shopping in stores, particularly for the categories we sell, which is why we believe that our stores will always be the most important sales channel for our business. Pleasingly, gross profit margins have remained very healthy, above our long-term average of 42%-43%, with strong growth returning to men's shavers after having stagnated at the start of last year during lockdowns when men chose to grow more stubble. What's also really pleasing is that we're continuing to see really strong sales growth across beard trimmers, despite these performing very well over the past two years.
With these categories having higher than company average margins, this together with disciplined pricing, is leading to our margins remaining very healthy. We ensure the very encouraging start to FY2023 financial year. In terms of outlook, having regard to the importance of Black Friday, Christmas, and Boxing Day promotions to the Shaver Shop's annual financial results, as well as the continuing uncertainty caused by the global pandemic and changing macroeconomic environment, it is not appropriate for Shaver Shop to provide FY2023 sales or profit guidance at this point in time. Now, that concludes the formal part of today's presentation. Larry and I will be more than happy to spend some time taking questions, from the audience.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. The first question comes from Andrew Johnston, MST. Please go ahead. Sorry. It's Danny Younis with Shaw and Partners. Please go ahead.
Oh, hi, guys. Sorry, I only joined a couple of minutes ago, so my apologies if you've answered these questions. The first one is, you've talked about gains in market share. Apart from being anecdotal, can you give us any quantification of the move in market share in the various categories?
No, not really. Look, you probably know that a lot of our categories isn't audited, in terms of like, you know, an equivalent that the grocery channel may get. It is anecdotal, as we said, and predominantly from our major suppliers. You know, where they're broadly indicating that our rate of growth is healthier than competitors. As I said, it's anecdotal feedback.
Okay, thanks. In terms of online, I think in the first half, you were running at 41% of your sales. It's come down to 34%, which is expected. Your number of customers doesn't seem to have changed online. I think in the first half, if I remember correctly, you were up 50% to about 650,000. It stayed at that number at year-end. How should we look at online moving forward? Will it head down into, you know, the 25%-30% of sales range and the customer numbers not growing as much above that 650,000?
Yeah, I think that's pretty fair, Danny. You can see on one of the slides that we've provided that on a quarter-by-quarter basis, online sales reduced to about 22-23% in Q4. You know, online sales represent a higher proportion of sales as we trend into Black Friday and Christmas because traditionally that's a strong online time for us. Overall, I think number of customers, hopefully, active online customers stays around that 650,000 level or so, maybe slightly lower over the course of the next year. Average as a percentage of total sales, I would expect it to revert somewhere between that 25%-30%, as we sort of predicted a couple of years ago once things go back to normal.
Okay, thanks. Maybe another one for you, Larry.
Yeah.
I'm taking out one of my favorite waterfall charts that you've previously put in, around sales and EBITDA. Can you maybe. Clearly, there looks like to have been a step-up in your buybacks. First half, I think they contributed about AUD 2.5 million, AUD 8.5 million by the year-end. Is that full 100% revenue from your buybacks? And secondly, what were the permanent closures? Because first half, I think you had just under AUD 1 million in permanent closures. What did they finish at in FY2022, please?
In terms of the numbers for the buybacks first half, second half, those numbers are accurate. The issue with the first half obviously was the stores were closed like every other store in New South Wales for those three months. The important takeaway is that those buybacks when they've been open have absolutely been performing to expectation. They're powerhouse stores and have been really accretive. Unfortunately, Danny, I don't have that number for you that you've asked about for the second part of your question. Unfortunately, I just don't have that number in front of me at the moment.
No, that's okay. We'll take that one offline. Just the final one if I can. Gross margin still very solid and, you know, 43.9%. Putting aside cost inflation the next 12 months, and hopefully no further shutdowns or COVID restrictions, how should we look at that moving forward? You know, in line with historicals, you know, pre-FY2020, or can you hold it?
I think one of the pleasing elements that we're seeing is, you know, real focus on our exclusive product lines.
Yeah.
Better alignment at store level. Obviously our exclusive product line run at a higher gross profit margin. You know, I think there's some really encouraging signs about our gross profit margin stabilizing at higher than, you know, long-term historical averages, certainly pre-COVID. But having said that, obviously we've just got to be conscious that we are coming into, you know, big promotional events like Black Friday, where traditionally the GP does dip a little bit, obviously, throughout that period.
All right. That, that's great. Thanks, guys.
Thank you.
Thanks, Danny.
Your next question comes from Andrew Johnston with MST. Please go ahead.
Morning, Cameron. Morning, Larry. Congratulations on a good result. Good to see those gross margins holding up. I'll start with the issue that I probably got pretty wrong nearly 12 months ago around product inflation. Can you talk about to what extent you actually are seeing that in the numbers? It's not apparent that you're actually seeing much at all. But to what extent are you not seeing your numbers because you've been able to effectively switch products to ones that are able to enable you to deliver the right price point?
Yeah. I think there's a couple of points to that. I think we mentioned previously that, you know, it's very rare that all the suppliers pass on a cost price increase at the same time, and that's exactly what we're seeing. We've sort of seen one or two suppliers pass on some cost price rises. And where we're probably a little bit more at risk, I guess, is in the categories we're not so strong, you know, the likes of female beauty and haircare. Within that core business of equipment trim, men's electric shaving, you know, men's grooming, I think it's fair to say that we've got such a strong market share and have so much scale that, you know, we're able to resist a lot of cost price increases and switch brands.
Because again, you know, you're talking about competing brands like Panasonic, Braun, Philips. You know, very, very rare that all three are gonna take price rises at the same time, and that's what we're seeing. The other thing I'd just call out is, I think what we're seeing to some degree is customers are still, you know, really prepared to pay, buy products representing customer value, but it doesn't necessarily have to be at the traditional, say, AUD 99 price point. You know, I think to some degree, customers are quite savvy, and as, you know, if a product represents great value at AUD 109 or AUD 119, they're still very, very much prepared to convert at that price point.
I think there's a couple of things going in the market whereby it's enabling us to be a little bit smarter with our promotional price points and protect those gross profit margins.
Okay. That's great. Thanks. Can you talk through the outlook for store openings over the next twelve months, two years?
Yeah. Look, I think in terms of outlook for openings, it's probably consistent with what we've indicated the last 12-18 months. I think Australia is at relative maturity. You know, we might be looking at sort of net positive one to two stores per annum. New Zealand is really the opportunity. You know, we really do feel that we could do another six stores there pretty quickly if we got the right commercials. Now that travel's reopened, I think that's the short to medium term opportunity for us. Australia is generally pretty stable. One to two net positive maybe, and New Zealand is really the growth region for us.
Right. Okay. You mentioned that your stock level per store is well below pre-COVID levels. Can you talk about why that's the case and do you expect that to remain in a similar level?
Yeah. Look, I think, you know, without wanting to appear arrogant, but I think we've just gotten far better at what we're doing over the last few years. I think the pandemic, to some degree, has forced us to do that. You know, during the pandemic, we were looking at, you know, controlling our costs. We really did, you know, squeeze inventory because to some degree, you never knew what was around the corner. To the guys' absolute credit at store level, you know, they are remarkable at selling the right product at the right price. I think from a business point of view, we've got better at streamlining our promotional program, making the trade-up part easier for the customer and our store teams.
We put the inventory behind those lines that we really feel are gonna represent the best value for the customer and support trade-up at store level. I just think we've really got a lot better at doing that as well as obviously aligning our promotional program to those exclusive product lines that we've been talking about so much, you know, over the last half an hour.
Right. Okay. Okay, great. If I can get just one last question. More of a general one and, you know, the outlook. Everyone's talking about slowing sales over the next 12 months to two years as, you know, discretionary income starts to decline. In the latest release a little and also in your last, I think it was the June update, you talked a bit about the issues that point to the sustainability of your earnings. You even used the words non-discretionary in relation to some of your products.
Now it's difficult, I suppose, sitting here looking forward, but what are the things that, you know, we should be looking for in your numbers or that you're planning to look at or focus on, to, I suppose, identify and ensure and determine the extent to which your sales actually are non-discretionary, which will of course lead to much better sustainability of your earnings compared with other stores, other companies with similar products.
Yes. I'll answer that one, Andrew. It's basically looking at our product lines compared to more like, say, apparel or other types of retailers that are more discretionary in nature. The products that we sell, you know, whether it's Men's Shavers or razors or electric toothbrushes, you know, these are all products that often have, you know, health, wellness, and cleanliness benefits associated with them. You know, they are discretionary in nature, but they are, I would say, less discretionary than some of the other product categories that we have.
I think, you know, we've shown in the last couple of presentations, and it's in the appendices to this one, the 15-year growth trend from the business, and we had a like-for-like sales comparison in the presentation in June. What you can see is that over that period, even through the global financial crisis, through Brexit, even coming in, you know, this past financial year with the pandemic, is our sales tend to be incredibly resilient. Now, that doesn't mean sales will always go up year on year. It's never a straight line. You know, certainly we would be expecting sales growth in 2023, just as a result of our stores, touch wood, as I said before, being open across the whole year.
What also Cameron mentioned is I don't think it's widely appreciated by our customers that the products that we sell often are very cost-effective alternatives to going to the hair salon or the barber, et cetera. As a result of that, you know, we wanna make that much more prominent in the marketing that we do so that it's more widely appreciated by our customer base. It's types of things that I think should hopefully lead us to having a more stable top line with a less discretionary aspect to it than maybe some of the other retailers out there. I hope that answers your question.
It's also a work in progress for us to get that marketing and advertising to reflect the cost-effective nature of our product ranges.
No, that's excellent.
Yeah.
Thanks. Thanks, Cameron. Thank you.
Pleasure. Thank you.
Thanks, Andrew.
Your next question comes from Rodney Benroy from The Private Investor. Please go ahead.
Hi, Larry. Hi, Cameron.
Hey, Rodney.
Well, well done on a great set of results this year, but also on the back of last year, it's quite tough. The general question for me, it seems like the story of today is that people returning to in-stores next year, hopefully, or this year now. Hopefully, we'll get everyone in stores, no mandatory lockdowns. Is that a fair summation that that's what's happening? What would be your points of emphasis in that regard? Is that, I guess, going to change anything for you or is it business as usual?
No, I think it is. In some respects, it's reverting back to almost, you know, our core strategy and business strength is a relief. You know, which our bricks and mortar business. It's actually our strength at store level. I know that may sound somewhat, you know, contradictory because, you know, you look at the lockdown period and our results have been phenomenal. I think we've been a retailer that's been able to successfully adapt and leverage our omnichannel model to really drive those online sales. You know, but having said that, we obviously had a bit of help with salons being closed, barbers being told, "Close," et cetera.
From my own personal point of view, and I think the business' point of view, there's actually a sense of relief, that now we hopefully have some clear runway ahead of us where store closures won't be, you know, will be a thing of the past, touch wood. You know, we can let our store team do the thing they do best, which is provide the best customer service and convert. I think the big thing that we have to do from our end is make sure that we provide the team opportunities to connect and engage with each other. That's partly the reason why state training meetings are so important. You know, it's not just making sure that we're the product and category experts showing them our new products.
You know, it's actually the fact that we haven't been able to get together as a team for two and a half years. And you know, the knowledge the guys get from sharing from peer to peer at these state training events, you can't really measure that. Yeah, long way of answering, but from my point of view, it's very much a sense of relief that, you know, things hopefully are starting to get back to our traditional model, which is, you know, we're a great online retailer, but fundamentally, you know, three-quarters of our revenue comes from bricks and mortar.
Brilliant. Thank you. That's just going to lead to my follow-up question and last question for today, which is, are you noticing? Well, basically it's to talk about your customers, but more specifically, have you noticed a change? Are you trying to keep the new customers you've gained over the past two years? Are they younger? Are they more female-oriented? Anything you could add in that area would be great, please.
Yeah, look, it may be a bit of a boring answer, I'm afraid, but it's probably pretty similar to what we're seeing. You know, about 50% of our clientele is female. They're shopping for the categories, you know, that have traditionally been very strong for us. You know, the likes of beard trimmers, men's electric shavers, as Larry mentioned, because people are returning to offices and wanting a clean shave. I think the big thing that we're just knowing, again, from feedback from the store teams is that something that we've already always known is the customer in Australia still loves to shop. They still love the tactility of being able to touch and feel products and ask questions. I know online gives people the opportunity to research, look at customer testimonials, et cetera.
At the end of the day, I still strongly believe, you know, we're a culture that thrives and loves the tactility of bricks and mortar shopping. That's all the feedback that's coming through from store teams. Actually people are, you know, really actually happy to be out and about again, going into shops again. I think that's why, you know, not getting ahead of ourselves, but, you know, we're pretty happy with how we started. We're obviously going into Father's Day now and we're, you know, quietly feeling pretty confident and comfortable leading into obviously the big events, you know, of Black Friday, Christmas, et cetera.
Fantastic. Thank you very much.
Pleasure.
Thanks, Rodney.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from James Casey with Ord. Please go ahead.
Good morning, gentlemen. Just a couple of questions on the cost of doing business. Just with the rent abatements that you received in FY 2022, I assume in FY 2023 they don't repeat, and you'll start to get rent increases across your properties.
Yeah. That's right. We're certainly not expecting any abatements in FY 2023. Yes, we will be getting increases across our rent expense. I mean, most of our stores are not CPI linked. There are stores in the network around 20%-30% that do have a CPI factor built into them. The remainders are fixed increases, and they'd already be reflected in our essentially the way the accounting works for our cost base at the moment.
Okay. In terms of employee benefits as a percentage of sales, obviously you have the benefit of, well, not a benefit, but you, that was lowered due to the store closures.
Yep.
Does that just trend back to more normalized levels? Is that the best way to looking at that line?
Yeah, that's exactly right, James. That 70 basis point or so gap we'd expect to revert back to around the 15% level.
Yeah. Okay. That's great. Thanks, James.
No worries. Thanks, James.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Fox for closing remarks.
Thank you. Just in closing, I just want to touch upon a few key points, so Shaver Shop. First and foremost, we are a segment leader, both online and offline. We do operate in a large and growing market driven by changing consumer preferences and new product innovation. COVID-19 has accelerated DIY personal care adoption and introduced new customers to Shaver Shop. We believe we're a differentiated and very resilient specialty retail business model, and the fundamentals hinge upon the service excellence and unparalleled product knowledge, extensive product exclusivity and competitive pricing. We do believe we have significant potential to further increase our market share. We have exceptional brand awareness in Australia, albeit New Zealand is still off a very low brand awareness base. We have a proven and highly profitable omnichannel model. Our financials exceptional. Clean balance sheet, no debt with very strong cash conversion.
We have a very experienced management and board of directors. Strong focus on investing for growth and improving total shareholder returns. Hopefully everyone agrees we have a very strong dividend payout. Now thank you to everybody for joining us today. We really do appreciate your support, and look forward to hopefully some ongoing success leading into what is a critical period of the year for Shaver Shop, leading into the December quarter activity. Thank you.