Several of Australia’s listed retail companies are yet to realise it’s no longer Christmas, with shares holding their price despite Deloitte’s Powers of Retailing report detailing expectations of volatility for the sector in the near future. Is it a calm before the storm? Deloitte has named Amazon and Lidl as potential disruptors to the retail environment in Australia this coming year, but for now, these three companies are holding strong. The Reject Shop Ltd (ASX: TRS) Share prices in the The Reject Shop are sitting around $6.24 on February 14, in line with the stock’s steady increase…
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Several of Australia’s listed retail companies are yet to realise it’s no longer Christmas, with shares holding their price despite Deloitte’s Powers of Retailing report detailing expectations of volatility for the sector in the near future.
Is it a calm before the storm?
Deloitte has named Amazon and Lidl as potential disruptors to the retail environment in Australia this coming year, but for now, these three companies are holding strong.
The Reject Shop Ltd (ASX: TRS)
Share prices in the The Reject Shop are sitting around $6.24 on February 14, in line with the stock’s steady increase in price over the last 6 months.
Share prices are still a far cry from the $8.42 price high this time last year, but the discount variety retailer is not experiencing the February share price slump to $5.40 it endured in 2015.
The Reject Shop last year announced expectations to report an NPAT of between $16 million and $17 million in the first half of FY18 so it will be interesting to see if it can deliver on this.
All eyes will be on The Reject Shop as it announces its half year results on February 21 after some disappointing annual results booked by the company in mid-2017, which saw NPAT fall 28% and sales down 0.7%.
Harvey Norman Holdings Limited (ASX: HVN)
Share prices in franchised retail giant Harvey Norman Limited opened down 0.9% on February 14 at $4.31, but the share price has generally been trending upwards since a November 2017 low of $3.68.
Deutsche Bank named Harvey Norman as undervalued last year and the retailer enjoyed a mid-year revenue boost in 2017 with its revenue up 4.8% to October 31.
Harvey Norman and discretionary-spending peer JB Hi-Fi Limited (ASX: JBH) are expected to bear the brunt of Amazon’s arrival in the Australian market, but things have been travelling along well for both players in recent times, with JB Hi-Fi’s share price sitting at $26.16, slightly below its February 2017 high of $28.53, but well up from its pre-Christmas slump of $21.89 in November.
Depending on the figures, Harvey Norman’s February 27 release of half-year results could give the company’s share price another boost.
Premier Investments Limited (ASX: PMV)
Speciality retail company Premier Investments Limited is best known for its Just Jeans, Jay Jays, Jacqui. E, Portman’s, Smiggle and Peter Alexander stores.
Premier Investments’ share price dropped slightly to $13.73 on February 14 and has been tracking down this month – sitting around the same point it was at this time last year.
Premier has portfolio diversification on its list of major pluses, with appealing brands only growing in popularity, especially the Peter Alexander sleepwear brand and Smiggle stationary brand.
Premier has been in the news for its “ongoing war” with embattled Australian department store group Myer Holdings Ltd (ASX: MYR) this week.
Premier is a significant shareholder in Myer Holdings, with 11% control of the company, whose CEO Richard Umbers has just announced his resignation off the back of a first-half profit downgrade of up to 41% and a potential board spill called by Premier’s Chairman Solomon Lew.
Premier Investments has offered to fund an extraordinary general meeting for Myer in coming weeks, outlining board nominees it backs.
Premier is due to announce its interim report on March 20 and results will be hotly anticipated.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended The Reject Shop 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.