Despite the unpredictable conditions blanketing Australia's retail sector, RCG Corporation Limited (ASX: RCG), which owns athletic footwear retailer The Athlete's Foot, still managed to perform strongly in the six-months ending December 31, 2014.
For the period, RCG Corporation reported net profit after tax (NPAT) of $5.57 million, an increase of 10.7% on the prior corresponding period (pcp), while earnings before interest, tax, depreciation and amortisation (EBITDA) were up 10.3% to $7.82 million.
So What: RCG Brands, which is RCG Corporation's wholesale and distribution division, did most of the heavy lifting during the half, while The Athlete's Foot performance was lacklustre. Thanks in part to the opening of three new Merrell stores during the period, RCG Brands recorded 71.3% sales growth to $30.38 million, while EBITDA was up 44.5% to $4.12 million.
However, short-term factors impacted the overall results of The Athlete's Foot business with like-for-like sales declining 1%, while overall sales rose just 1% to $94.8 million. The company said that these short-term impacts had begun to subside in the second quarter and it is still confident in the business' ability to drive growth.
Now What: Aside from its reasonable growth potential, one of the most appealing factors about RCG Corporation is its unbelievable dividend yield, which easily beats those of big-name companies such as Telstra Corporation Ltd (ASX: TLS).
RCG Corporation declared a fully franked dividend of 2 cents per share, complementing the 2.5 cent dividend announced in August last year. With the stock currently trading at 77 cents, that puts it on a 5.8% dividend yield, or 8.3% when grossed up for franking credits. As promising as RCG Corporation might be, our top analyst believes there is another dividend stock more worthy of your attention right now.
