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3 retail shares in my shopping basket

Considering the abject performances of Myer Holdings Ltd (ASX: MYR) and Retail Food Group Limited (ASX: RFG), amongst others, I can fully understand why some investors are staying clear of the retail sector.

However, despite the tough trading conditions and weak consumer sentiment, a number of retail shares continue to kick goals.

Here are three retail shares that I would put in my shopping basket:

Greencross Limited (ASX: GXL)

In the first-half of FY 2018 this integrated pet care company delivered a 4% lift in like-for-like sales across its Australian retail store network. A key driver of this growth was the roll out of its in-store veterinary clinics. Rather than acquiring existing veterinary clinics, the company has focused on adding clinics to existing stores. So far it has proven to be a huge success in my opinion. First-half like-for-like sales grew 7.5% in retail stores that already have in-store clinics inside them. I expect more of the same in the future as its roll out accelerates.

Lovisa Holdings Ltd (ASX: LOV)

This jewellery retailer continues to be my first pick in the retail industry after its solid half-year result. Lovisa reported half-year revenue of $118.6 million and net profit after tax of $24.8 million. This was an 18.9% and 22.5% increase, respectively, on the prior corresponding period. While a 10.8% increase in its store network helped lift total sales, so did its impressive 7.4% increase in like-for-like sales during the period. With the company rapidly growing its presence in Europe and recently entering the U.S. market, I think Lovisa could have a very bright future ahead of it.

Noni B Limited (ASX: NBL)

Noni B is another retailer that stood out for me during earnings season. It achieved a 35.1% increase in first-half revenue to $193.2 million and a 379.5% lift in first-half profit to $11.8 million. Thanks to the fact that Noni B operates in the niche but lucrative mature women’s fashion market, I think it is well positioned to continue its growth as Australia’s population ages and faces less disruption from online players such as Amazon. This could make it worth snapping up shares today with a long-term view.

As well as Greencross, Lovisa, and Noni B, these top growth shares are in the buy zone today and could be destined for big things in 2018 in my opinion.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Greencross Limited and Retail Food Group 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 Scott Phillips.

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