1 ASX dividend stock down 50% I'd buy right now

The Nick Scali Ltd (ASX: NCK) share price has taken a beating since late January 2026, dropping by just over 50%, as the chart below shows. I think this could be a good time to consider the ASX dividend stock.

Nick Scali operates Nick Scali stores in Australia, New Zealand and the UK, selling furniture. It also has Plush stores in Australia.

It's understandable that the ASX retail share is suffering because households are facing tough conditions right now. However, times like this make me think it's the right time to buy a cyclical business like a furniture retailer, given how far it has fallen.

Let's look at what the company said in a difficult update.

Challenging trading update

Nick Scali said that trading conditions in Australia and New Zealand remained challenging during the FY27 first quarter, with written sales orders down 15% year-over-year, while store traffic was down 10%.

It also reminded investors that it experienced a cybersecurity incident in August, which resulted in its systems being unavailable for three weeks. During this period, stores continued to trade, and sales orders were processed manually.

ANZ revenue for the first half is expected to be down between 11% and 14% year-over-year.

The company said it expects group net profit after tax for the FY27 half-year result to be in the range of $28 million to $32 million. This implies underlying profit could decline by at least 22%. That underlying net profit figure excludes approximately $1 million of direct costs for consultants and legal advisers relating to the cybersecurity incident.

At the current Nick Scali share price, I think there are four key reasons to like the ASX dividend stock.

Compelling reasons to buy the ASX dividend stock

First, the company is much cheaper now, and it could be at (or near) a cyclical low. A share price usually hits the lowest point before the financials show the worst.

It's now trading at under 14x FY26's earnings, which I think looks cheap for a quality retailer.

The company also highlighted a couple of positive points in its trading update.

Firstly, the UK business continues to improve. UK written sales orders in the first quarter grew 29% year-over-year, with like-for-like written sales orders up 14%. The difference between those two numbers is partly explained by stores that were temporarily closed for refurbishment during the period. It expects to open one new UK store in late December as it continues to expand in the UK.

The UK business could quickly become a sizeable contributor to the overall business if it keeps growing at a double-digit pace.

Its store network in Australia also continues to grow. Two new ANZ stores opened in July, with a further two stores expected to open in late December, continuing its network expansion strategy. This could help with both scale benefits and a revenue boost.

According to the projection on Commsec, it could pay a grossed-up dividend yield of 7.4%, including franking credits. The fall in Nick Scali's share price has boosted the yield.

I think it's a compelling ASX dividend stock to consider after this large decline, though it's not the only ASX share I have my eye on.

The post 1 ASX dividend stock down 50% I'd buy right now appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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