Are Retail Sector Stocks Under Pressure This Christmas?

retail sector

As seen lately, ASX retail sector has been on a downtrend this year with heightened competition as well as strategic moves undertaken by Amazon, which is trying to grab a bigger chunk of the market share. Amidst this, investors are watching out for the retail sector stocks and below is a snippet of the scenario for some popular names.

Premier Investments Limited (ASX: PMV) is Australia based consumer good and fashion retailer expanding across territories such as Singapore and the United Kingdom. Its wholly owned, Just Group encompasses brands such as Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.  

As per the company’s latest annual financial results, total revenue for the year increased by 7.98% to $1,189,040. The company reported an increase of 8.19% in the sale of its goods to $1,182,221 for the period of 52 weeks ended 28th July 2018. Net comprehensive income of $1,427,000 was recorded for 2018 as compared to Net Loss of $789,000 in 2017.

The company’s share price has been on a downtrend falling by around 11% over the last six months and approximately 7.5% over last month.

The UK government announced overnight that it’s activating its emergency no-deal Brexit plan and putting aside £2 billion ($3.5 billion) for the various departments to manage the risk of hard Brexit revolution. Post the announcement today, the company’s share price went up by 1.14%, closing at $15.110.  However, PMV’s stock faces immense pressure over uncertainty revolving around critical Brexit expected to happen around March 2019, given the company’s strong presence in the UK Market. During the 2018 financial year, the company opened its first-ever Smiggle concession store in the UK.

Super Retail Group Limited (ASX: SUL) is a major player in Australia’s retail industry owning various brands such as BCF Boating Camping Fishing, Macpac, Supercheap Auto, Rays, Amart Sport and Rebel sport. Its principal business segments include Auto, Leisure, and Sports. It owns over 670 retail stores across Australia, China, and New Zealand.

As per recent annual report shared by Super Retail, the company reported an increase of 4.2% in annual sales to $2570.4 million, contributed by new store sales as well as Macpac sales. The Normalised Net Profit After Tax (NPAT) of $145.3 million was recorded, representing an increase of 7%.

However, SUL stock has been following a downtrend since last six months with a return of -15.43% as at 19th December, close of market hours.

Accent Group Limited (ASX: AX1), formerly RCG Corporation Limited, is a leading footwear retailer and distributer across Australia and New Zealand. It owns over 420 stores across different retail brands such as Vans, Skechers, CAT, Timberland and many more.

The group’s annual financial results reflect underlying EBITDA of $90.8 million, an increase of 16% over the prior year. The dividend pay-out increased by 25% over last year, with a fully franked dividend of 3.75 cents per share.

Over the past one year, group’s stock has witnessed a strong performance growth of 50%. Over the last three months, the stock price is down by around 22%, but it has again gained momentum since a month showing an upside of 18.31%. The current market price as on 19th December 2018 is $1.205 (down by 4.4%).

The company’s stock reflects significant upside, with its performance change of around 492% since its inception till date. Investors may want to keep the stock in their watchlist.

Retail Food Group Limited (ASX: RFG) is a global food and beverage company. It is Australia’s largest multi-brand retail food franchise owner, a roaster and supplier of high-quality coffee products. It covers brands such as Gloria Jeans, Pizza Capers, Donut King, Brumby’s Bakery, Michel’s Patisserie and many more.

The company reported a statutory loss after tax of $306.7 million in FY18 as compared to statutory profit after tax $ 61.9 million in FY17. The company’s balance sheet reflected net debt of $258.9 million as on 30 June 2018. The company is considering potential asset sales and alternate funding options.

The company’s stock is on the significant downside from the past one year falling by almost 88% ($2.540 on 18 December 2018). The current scrip price as on 19th December 2018 is $0.325 (down by 1.5%). The company’s share price has fallen by around 69.30% since its inception.


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