- The COVID-19 pandemic changed consumer shopping habits amid lockdowns with more customers switching to the online mode.
- Warehouse Group saw a strong growth of 118.2% in online sales in Q1 FY22.
- Michael Hill reported that digital sales rose 58.2% for Q1 FY22 as compared to Q1FY21.
Online retailers cornered several offline businesses in the COVID-19 pandemic as consumers switched to online shopping amid pandemic-induced restrictions.
However, retailers recognised that these habits would stay for a long period now even as curbs slowly lifted. A company is expected to meet consumers’ in-store and online requirements. A retailer can collaborate with various platforms if the company cannot fulfil customers’ online needs.
Amid this backdrop, let’s look at the performance of these 4 NZX retail stocks and their online presence.
Image source: © 2021 Kalkine Media, Data source- Refinitiv
The Warehouse Group (NZX:WHS)
The Warehouse Group reported a 14.6% drop in retail sales for the Q1 ended 31 October 2021 to $630.7 million while the gross profit margin reduced 200bps to 32.9%. The Group also witnessed strong growth of 118.2% in online sales, representing 30.1% of Group sales despite COVID-19 disruption caused.
WHS remains well positioned and ready to meet the peak period of Christmas and summer demand.
On 19 November, at the time of writing, WHS was trading at $3.99, up 0.5%.
For the 13-week period ended 31 October 2021, the Group's revenues fell by 14% on a pcp basis to $138.5 million.
During the first three weeks of the lockdown, which began on 18 August, all three BGP stores stayed closed. The possible effect of these lockdowns was mitigated by a 98% increase in online sales in the quarter.
Online sales represented 38% of all sales and the Group was able to serve its customers well.
On 19 November, at the time of writing, BGP was trading at $6.99, up 1.3%.
Kathmandu Holdings Limited (NZX:KMD)
Kathmandu Holdings revealed that its earnings in Q1 FY22 were affected due to COVID-19 induced lockdowns. The Group’s same store sales were significantly impacted with a 9.4% decline in Rip Curl sales and A17.6% drop in Kathmandu sales when adjusted for COVID lockdowns.
However, KMD’s online sales surged 33.8% with Rip Curl sales increasing 11.2% and Kathmandu increasing 58.4%. The Group’s net COVID-19 impact is likely to result in an operating profit of c.$35 million below 2020 for Q1.
On 19 November, at the time of writing, KMD was trading at $1.59, down 0.63%.
Michael Hill experienced a remarkable FY21. The Group delivered a 15.5% growth in same store sales and margin growth of 100 to 200 bps in all markets for Q1 FY21. Digital sales rose 58.2% for the quarter as compared to Q1FY21 and represented 9.4% of all sales.
The Group entered FY22 in a strong financial position and has taken some strategic initiatives for the year ahead.
On 19 November, at the time of writing, MHJ was trading at $1.23, up 1.65%.
Retailers must realise that increased dependence on online shopping and digitisation of various firms is here to stay.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)