CBA expects bumper Black Friday shopping; 5 ASX retail shares to look at

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CBA expects bumper Black Friday shopping; 5 ASX retail shares to look at

 CBA expects bumper Black Friday shopping; 5 ASX retail shares to look at
Image source: VideoFlow,Shutterstock

Highlights

  • According to the CBA’s latest analysis, Aussie retailers may witness a bumper Black Friday shopping weekend.
  • Spending over the four days from Black Friday to Cyber Monday inclusive in 2020 rose 14% in comparison to the week prior.
  • The five ASX-listed retail stocks which can be looked at include – TPW, JBH and COL.

ASX-listed retail shares are expected to gain the most as analysts expect a strong Black Friday sales weekend. According to the latest analysis by Commonwealth Bank of Australia (CBA), Australian retailers may witness a bumper Black Friday shopping weekend if the spending replicates trends from past years.

CBA’s merchant data showed that spending over the four days from Black Friday to Cyber Monday inclusive in 2020 (27 November to 30 November) surged 14% in comparison to the week prior. On a similar note, the sales rose by 14% compared to the same four days of the prior week in the four days of Black Friday sales (29 November to 2 December).

Furthermore, overall spending rose 10% in 2020 over the four-day Black Friday period in comparison to 2019. 

“Businesses are viewing the Black Friday and Cyber Monday weekend period as an opportunity to grow their customer base, spending patterns and behavioural changes. It also presents an opportunity for retailers to bring forward sales, optimise their inventory and enhance performance for the year if they manage these sales events well,” said Jerry Macey, the Head of Consumer and Diversified Industries in CBA’s Business Banking division.

Here are five ASX-listed retail stocks to look at. These have given a return of over 30% in the past five years.

Temple & Webster Group Ltd (ASX:TPW)

Temple & Webster is an Australia-based online retailer. The firm has made significant investments in its offline and online businesses in the past few years.

In FY21, Temple & Webster achieved revenue growth of 85% to AU$326.3 million. At its recent annual general meeting (AGM), the company said that its revenue for the period 1 July to 15 October rose 56% over the prior corresponding period. The revenue per active customer in FY21 rose 12% year on year.

CEO Mark Coulter said: “We continue to experience strong tailwinds, including the ongoing adoption of online shopping due to structural and demographic shifts and an acceleration of these trends due to the COVID-19 pandemic.”

The company has plans to reduce its profit margins in the medium term by investing in growth areas of the business to boost its online market position.

The stock’s five-year return stands at over 7,257%.

Accent Group Ltd (ASX:AX1)

Accent Group is engaged in retail and distribution of footwear and apparel businesses.

According to the company’s latest trading update for the first 18 weeks of FY 2022 (ended 31 October), the operations were significantly impacted by store closures in New South Wales, Victoria, and the ACT.

The company expects that the impact on owned retail sales (including digital) for the first 18 weeks was AU$86 million, nearly 26% below the original management plan.

In FY21, the total sales increased 19.9% to AU$1.14 billion, earnings before interest and tax (EBIT) grew 32.1% to $124.9 million. The net profit after tax (NPAT) rose 38.6% to AU$76.9 million.

The stock’s five-year return stands at over 88%.

JB Hi-Fi Ltd (ASX:JBH)

JB Hi-Fi is an Australia’s leading retailer of home consumer products.

In FY2021, the company reported record profits compared to previous year. The company’s online segments received AU$780 million in sales last financial year.

In its recent annual report, the company’s management showed positivity toward FY22. The company CEO Terry Smart said that despite FY21 was a challenge for the retailer, its business model saw it performing better than ever before.

The stock’s five-year return stands at over 76%.

 

Image Source: © Iqoncept  | Megapixl.com

Coles Group Ltd (ASX:COL)

Coles is a supermarket chain in Australia. The company managed to boost its sales revenue by 3% in FY21 despite challenges faced due to the COVID-19 pandemic. The net profit surged by 7.5% during the period.

The company also opened an additional 64 new stores during the period under review.

“Looking ahead, as vaccination rates continue to rise across the country, we are optimistic on the outlook for the Christmas period as Australians adjust to life after lockdowns and are once again able to enjoy time with family and friends,” Coles’ CEO and managing director Steven Cain said while sharing the company’s outlook at the recently concluded AGM.

In the three months ended 30 September 2021, Coles reported a 1.5% rise in total sales to AU$9,756 million. The growth came on the back of a strong performance by the Supermarket and Liquor businesses which offset the weakness in the Express business.

 

The stock’s five-year return stands at over 40%.

Super Retail Group Ltd (ASX:SUL)

Super Retail Group operates in retailing of auto parts and accessories, boating and other outdoor equipment and sporting equipment and apparel etc.

The company last month revealed that the trade was badly impacted in the first 16 weeks of the new financial year, with its Macpac brand taking the biggest hit. However, the retailer still reported strong results in FY2021.

In FY 2021, the company posted a 22% rise in sales to AU$3.45 billion and a 107% surge in normalised net profit after tax to AU$306.8 million.

The stock’s five-year return stands at over 32%.

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