The retail industry is one of the biggest contributors to the economy and the ASX index is full of many different retail businesses.
Some of the biggest companies in the country are retail shares like Wesfarmers Ltd (ASX: WES), Woolworths Limited (ASX: WOW), Greencross Limited (ASX: GXL) and Premier Investments Limited (ASX: PMV).
However, there are also some much smaller retail businesses that could deliver good growth in the next couple of years:
Noni B Limited (ASX: NBL)
Noni B is one of the few companies that can say that it's a turnaround story. The share price hit $0.37 in 2014 and now it has risen to $2.51. The company has effective management and the stores are offering exactly what the customer wants.
In its recent half-year report Noni B reported that revenue grew by 35.1% to $193.2 million and like-for-like sales grew by 3%. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 54.5% to $22.1 million and net profit after tax (NPAT) grew by 380% to $11.8 million.
It's still trading at a reasonable valuation and has a grossed-up dividend yield of 7.4%.
Nick Scali is one of Australia's leading furniture retailers. Its offering is resonating with consumers who want high quality furniture sourced from around the world.
The business has been growing at an impressive rate each year and the recent half-year result was no different. Its sales increased by 8.1% to $128 million and the like-for-like sales grew by 2.6%. Net profit after tax (NPAT) increased by 15% to $23.5 million. Finally, the dividend increased by 14%.
Nick Scali is also trading at decent value and it has a grossed-up dividend yield of 7.34%.
Foolish takeaway
Both of them are the type of stocks that are growing at a good rate whilst trading at a low price/earnings ratio. If they continue to grow profit by double digits then more share price growth could be around the corner.
