WHS, MHJ: 2 retail stocks in focus as NZ’s online shopping soars in Q1

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WHS, MHJ: 2 retail stocks in focus as NZ’s online shopping soars in Q1

retail stocks
Image source: Natee Photo, Shutterstock.com

Highlights

  • NZ’s online shopping saw a 31% surge in Q1 2022
  • The Warehouse Group grew 7.4% in FY22 Q3
  • Michael Hill International’s strong digital growth continues

According to recent report by NZ Post, Kiwiland witnessed more than NZ$2.2 billion in online spending in Q1 2022, i.e., up 31% on pcp and, a massive 86% growth during the same period in 2020.

The numbers suggest that online spending has more than doubled in these three years, which reflects a seismic shift that digital shopping has gone through during the COVID-19 pandemic. Moreover, the fast spread of Omicron and stringent isolation criteria saw a surge in online shopping.

Reports also reveal that the top three fastest growing sectors for online spending include homewares, appliances and electronics, followed by health and beauty, and clothing and footwear.

With this backdrop, let us look at the two NZX-listed retail stocks- The Warehouse Group Limited (NZX:WHS) and Michael Hill International Limited (NZX:MHJ).

NZ retail stocks- WHS, MHJ

Source: © Nitsuki | Megapixl.com

The Warehouse Group Limited (NZX:WHS)

The Warehouse Group Limited is one of the largest retail brands across NZ, selling a broad range of both grocery and non-grocery products. Last month, WHS announced that its director, Will Easton, has sought a departure from the Group.

Must Read: WHS, HGH, ANZ: 3 stocks with over 7% dividend yield

Further, in spite of facing disruptions due to the COVID-19 pandemic, The Warehouse Group’s online sales continued to grow in FY22 Q3 to NZ$86.6 million, with a rise of 7.4% as compared to pcp. Moreover, during this period, year-to-date Group online sales surged 50.2% to NZ$422.2 million as compared to YTD FY21, thus displaying the adaptability of its business model during uncertain conditions.

At the time of writing on 7 June, WHS was down 1.46% at NZ$3.380.

Michael Hill International Limited (NZX:MHJ; ASX:MHJ)

Michael Hill International Limited is the country's well-known retail jewellery chain operator. Recently, it had disclosed selling its Canadian credit receivables to a Canada-based provider of consumer credit, Flexiti, i.e., the latter will now offer third-party consumer credit to all MHJ stores based in Canada.

This move will strengthen MHJ’s balance sheet and cash position, as well as help in expanding and enhancing its Canadian offering.

Do Read: PGW, MHJ, OCA: 3 NZX small-cap stocks grabbing Kiwis’ attention

Further, MHJ, in its Q3 trading update ended 27 March 2022, shared that YTD digital sales saw a jump of 31%, underpinned by expansion opportunities in new territories and disciplined working capital management.

At the time of writing on 7 June, MHJ was declining 1.79% at NZ$1.100.

Bottom Line

Despite headwinds like Omicron-induced lockdowns, lower foot traffic, and staff shortages, NZ retail stocks remained resilient and delivered strong growth.

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