- The US reported that its retail sales shot up by about 0.9 per cent in April.
- Empire Company's sales increased by 358.6 per cent YoY to C$ 7.37 billion in Q3 FY2022.
- Pet Value saw its system-wide sales swell by 30.2 per cent YoY to C$ 285.9 million in Q1 2022.
The US Retail Sales data for April was projected to have an impact on Canadian markets before its release on Tuesday, May 17. The USD/CAD had struggled around 1.2850 ahead of the release.
On Tuesday, the United States reported that its retail sales shot up by about 0.9 per cent in April despite record-high inflation.
According to an April 2022 report released by market researcher NPD Group, consumer spendings in upper-income groups (US$ 50,000-75,000 and US$ 75,000-100,000) are likely to increase (by 1.6 and 0.7 per cent, respectively). However, the report also suggested that the prevailing macroeconomic factors are likely to affect the lower income group (earning less than US$ 50,000).
Let us look at five TSX retail stocks amid all these developments.
1. North West Company Inc (TSX: NWC)
North West Company reported a year-over-year (YoY) surge of 2.4 per cent in its sales to C$ 579 million in Q4 FY2022. This sales growth was primarily driven by same-store sales growth in international operations and new store sales.
NWC's return on equity (ROE) was approximately 30 per cent. ROE indicates the company's financial performance in terms of net income divided by shareholders' equity. NWC stock spiked by roughly five per cent year-to-date (YTD).
2. Empire Company Limited (TSX: EMP.A)
Empire Company is a large-cap company that operates different retail stores and investment businesses in Canada. Empire Company's sales increased by 358.6 per cent YoY to C$ 7.37 billion in Q3 FY2022.
EMP.A had a price-to-earnings (P/E) ratio of 15. P/E ratio signifies whether the stock is undervalued (if less than 11) or overvalued (more than 11). EMP.A zoomed by over nine per cent in 2022.
3. Pet Valu Holdings Ltd (TSX: PET)
Pet Valu Holdings is a mid-cap firm that sells pet products and services through its stores. The pet-focused firm saw its system-wide sales swell by 30.2 per cent YoY to C$ 285.9 million in Q1 2022. The firm expects its system-wide sales to grow to nine per cent to 12 per cent in 2022.
PET's P/E ratio was 24.30, and its stock was up by over four per cent in the last three months.
4. BMTC Group Inc (TSX: GBT)
BMTC Group, through its retail network, sells furniture, household and electronic appliances. The small-cap cap company held a P/E ratio of 6.5, indicating that the stock is undervalued at the current market prices.
BMTC stock grew by almost six per cent in a year.
5. Indigo Books & Music Inc (TSX: IDG)
Indigo Books & Music entered into a partnership with Good Earth Cafes Ltd to open up its coffeehouses in select Indigo locations in Canada. This partnership deal is aimed at enhancing consumers' experience.
IDG's revenue increased to C$ 430.66 million in Q3 FY2022 compared to C$ 365.42 million in Q3 2021. Its net profit also surged to C$ 45.14 million in the latest quarter compared to C$ 30.72 million a year ago.
The TSX retail stocks mentioned above have seen growth in their revenue and net earnings in their latest quarter. Some like North West, Empire Company and Peta Valu also pay dividends, adding another income stream.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.