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Consumer stocks are sensitive to household spending and economic activity. Some consumer companies are highly sensitive to economic cycles, while some companies have non-cyclical sources of revenues.
Companies have finished reporting earnings. Nearly one year later after the companies rushed to suspend dividends, the earnings season has implied that dividend recovery is well underway across the broader market.
Australian indices are still off from their last year highs. The economic recovery appears robust as job opportunities are rising. More importantly, vaccinations are underway at mass scale across countries, which has driven hopes of pre-pandemic normal.
The stocks under discussion are leveraged to the global markets as they sell their considerable amount of products and services overseas.
Domino’s Pizza Enterprises Ltd (ASX:DMP)
Domino’s Pizza shares have lost track of late as yields rose significantly. DMP is a widely known high growth stock and may seem expensive to a conventional investor looking at earning multiples. Above $90 a share, the stock is nearly double from its March 2020 low.
Last year, the QSR biz managed pandemic via store closures. But later, online sales surged dramatically. While the online sales momentum remain evident in FY21, the company has delivered significant earnings growth in the first-half.
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Domino’s Pizza is leveraged to developed markets in Europe, Japan and ANZ. The regions have scope for additional growth. In the first half, the company added 131 new stores, and its same stores sales growth was 8.5% while network sales rose 16.5%.
Network sales for the half year were $1.84 billion, while revenue came at just over $1 billion, up nearly 21%. On an underlying basis, EBITDA grew 23.8% to $218.7 million from $176.7 million in the same period last year.
Underling net profit after tax rose 32.8% to $96.2 million from $72.4 million in the same period last year. The company declared 88.4 cents per share interim dividend, which increased by 31.7% from 66.7 cents per share.
Cettire Limited (ASX:CTT)
Cettire is a global online fashion retailer. It is a newly listed stock on the ASX. The company sells over 1,300 brands and more than 160,000 products. At the end of December 2020, it had around 68,000 active customers.
Recently, the company reported its maiden results to the exchange. The average order value in the first half was $776 and international revenue was over 90%. Cettire offers large categories of luxury apparel online at competitive pricing and rapid fulfilment.
Its proprietary tech platform enables the business driven by automated management of customer fulfilment cycle. The company also has inventory integration with suppliers, which aid the inventory management.
Cettire believes growth would be delivered leverages by traffics and customer experience. It is committed to data driven marketing, increasing product base, partnerships with BNPL, and broadening supply partnerships.
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In the first half, the online retailer reported sales revenue of $40.5 million, up 479% from nearly $7 million in the same period last year. Adjusted EBITDA for the period was $4.44 million, up nearly 400% against 1HFY20. Net profit after tax rose 354% to $2.3 million.
PWR Holdings Limited (ASX:PWR)
Known for its cooling systems, PWR manufactures leading cooling systems used in race categories like NASCAR, World Rally Championship. Its end-to-end in house manufacturing of parts gives competitive strengths.
Besides, the company is keen to diversify its revenues stream. The company is catering to various industries under its emerging technologies segment. With AS9100 Accreditation, it hopes to capitalise on defence and aerospace opportunities.
Under emerging technologies, it also provides battery and hybrid cooling systems, additive manufacturing applications, super alloy brazing, and simulation and modelling services for computational fluid dynamics.
In the first half of FY21, the company’s revenue from emerging technology rose to $4.6 million from $2.68 million in the same period last year. Total revenue rose 25% to $37.2 million from $29.8 million in the same period last year.
EBITDA for the half year period was $12.2 million, up 60% from $7.2 million in H1 FY20, driven by improved margins. Net profit after tax was up 90% to $6.6 million from $3.5 million in the same period last year.