MENU

Are these ASX shares the winners from yesterday’s retail sales surprise?

After three consecutive months of declines, retail sales bounced back into positive territory in April according to data released by the Australian Bureau of Statistics yesterday.

Not only were retail sales in positive territory, but an increase of 1% month-on-month was well ahead of expectations. Economists had been expecting sales to lift 0.3% in April according to Bloomberg.

Here were the retail winners in April:

Domino’s Pizza Enterprises Ltd (ASX: DMP), Collins Foods Ltd (ASX: CKF), and Retail Food Group Limited (ASX: RFG) are likely to have had a good month. Sales in cafés, restaurants, and take away food services rose 1.1% during the month.

Food sales rose by an even stronger 1.2% in April, no doubt much to the delight of Wesfarmers Ltd (ASX: WES) and Woolworths Limited (ASX: WOW).

But arguably the biggest winner in retail in April was Myer Holdings Ltd (ASX: MYR) thanks to a 2.5% increase in department store sales.

Though it is worth pointing out that Myer has already revealed its own sales for the 13 weeks to April 29. Sales fell 3.3% on the prior corresponding period, but would almost certainly have been far worse had it not been for April’s rebound.

Shareholders will be hopeful that the strong sales trend continued into May.

Is the retail gloom over?

It’s going to take another month of strong retail sales to convince me that the tide is turning.

After all, there is a danger that April’s data is a touch misleading due to the impact that Cyclone Debbie had on retail sales in March.

Not only did the cyclone cause a notable dip in sales in Queensland and northern New South Wales, but the disruptions it had on the supply chain led to higher prices for certain food products.

Foolish takeaway

While the data is promising, I believe it is too soon to get excited over it. I feel investors might be better off focusing on other areas of the market for the time being.

However, there is one retail share with a huge dividend yield that I would suggest investors consider buying today. Thanks to its international expansion I expect it to deliver solid earnings growth over the next few years.

We've just released our #1 dividend pick for 2017. And the winner is...

With its shares up 155% in just the last five years, this 'under the radar' consumer favourite is both a hot growth stock AND our expert's #1 dividend pick for 2017. Now we're pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is click the link below!

Simply click here to receive your copy of our brand-new FREE report, "The Motley Fool's Top Dividend Stock for 2017."

Motley Fool contributor James Mickleboro owns shares of Collins Foods Ltd. The Motley Fool Australia owns shares of Retail Food Group Limited and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.