AUS
NZ
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IND
Highlights
- The NZ retail sector is encountering severe costs burdens with falling sales and foot traffic due to COVID-19-induced disruptions.
- MHJ expects to report an EBIT growth of $49 million to $53 million for H1 FY22.
- KMD expects EBITDA to be between $9 million-$11 million for H1 FY22.
NZ’s retail sector is facing extreme costs pressures with falling sales and foot traffic due to COVID-19-induced curbs. The sector has appealed to the NZ Government to offer support to keep business sustainable and avert job losses.
Greg Harford Retail NZ Chief Executive stated that an astonishing 59% of retailers had displayed that they might not survive the next 12 months. Moreover, confidence has dropped after NZ stepped into the red traffic light setting.
He added that the retail trade association had asked the Government to reinstate the Wage Subsidy and the Resurgence Support Payment to support the sector.
On this note, let’s look at how these 3 NZX retail stocks are doing.
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Michael Hill International Limited (NZX:MHJ; ASX:MHJ)
Michael Hill is an NZ-based jewellery retailer and has a market cap of $0.54 billion. The Company has given a YTD return of 105.48%.
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The Company reported strong sales, cost controls and inventory management, leading to a sound cash position at the end of Q2 ended 26 December 2021. MHJ expects to report an EBIT growth of $49 million to $53 million for H1 FY22.
MHJ ended the day 3.33% in red to close at $1.45.
Kathmandu Holdings Limited (NZX:KMD; ASX:KMD)
Travel-related clothing and equipment supplier Kathmandu Holdings has a market cap of $1 billion and has given a YTD return of 9.45%.
DO READ: NZ moves to phase 2 of Omicron response from today
KMD reported strong same store sales growth since the reopening of the Australasian store network in Q2 FY22. The Group remains well capitalised to expand further while forward wholesale demands for its products remain at record levels despite supply chain challenges.
KMD expects EBITDA to be between $9 million-$11 million for H1 FY22.
KMD ended the day 0.72% in red to close at $1.38.
Briscoe Group Limited (NZX:BGP; ASX:BGP)
Homeware and sporting goods operator Briscoe Group has a market cap of $1.42 billion and has delivered a YTD return of 21.73%.
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BGP delivered remarkable sales in the fourth quarter (1 November 2021–30 January 2022) despite uncertainty and disruptions due to the COVID-19 pandemic. The Group expects an NPAT of nearly $87 million for the full year, exceeding the upper range limit of $85 million given in previous guidance.
BGP ended the day 0.32% in red to close at $6.31.
Bottom Line
The retail sector of NZ needs support from the Government as the sector is witnessing increasing costs, staffing shortages and other COVID-19-related problems.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)