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Highlights
- 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- EODHD/Others
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.
RELATED READ: The Warehouse Group (NZX:WHS) provides sales update for Q1 FY22
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%.
Briscoe Group Limited (NZX:BGP; ASX:BGP)
For the 13-week period ended 31 October 2021, the Group's revenues fell by 14% on a pcp basis to $138.5 million.
ALSO READ: How did Briscoe (NZX:BGP) perform in third-quarter 2021?
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.
RELATED READ: Which 2 NZX retail stocks to be explored before holiday season?
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 International Limited (NZX: MHJ, ASX:MHJ)
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.
DO READ: Michael Hill (NZX:MHJ): Which strategy updates were provided in AGM?
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%.
Bottom Line
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)