Yesterday Myer Holdings Ltd (ASX: MYR) reported its interim results and posted a massive $476.2 million loss. This was the first time that the department store operator has posted a loss in the first-half period which includes the lucrative Christmas and January sales trading period.
I suspect that Myer's abject performance has many investors concerned about investing in the retail sector now. But I wouldn't let that stop you.
After all, there are still plenty of retailers out there that are crushing it even in a weak retail environment.
Two retailers at the top of their game that I would buy today are listed below. Here's why I like them:
Lovisa Holdings Ltd (ASX: LOV)
I was very impressed with this fashion jewellery retailer's performance in the first-half of FY 2018. Lovisa reported half-year revenue of $118.6 million and net profit after tax of $24.8 million, up 18.9% and 22.5%, respectively, on the prior corresponding period. This growth was the result of a combination of the retailer's international expansion and strong like-for-likes sales growth. Like-for-like sales grew 7.4% during the period thanks to a strong Christmas and Boxing day trading period and management's continued delivery of on trend products. I expect a similarly strong second-half, especially if its recent expansion into the U.S. market is a success.
Premier Investments Limited (ASX: PMV)
On Friday of last week this retail conglomerate delivered a solid first-half result thanks to the continued success of its key Smiggle and Peter Alexander brands. During the half Smiggle's global sales grew by 26.7% to $170.7 million and Peter Alexander's sales grew by 15% to $114.4 million. Both brands achieved strong like-for-like sales growth. Another big positive was the success of its online sales. They grew by 71.2% during the period to $56 million. Which means that management expects to achieve its "$100 million by 2020" target in the 2018 calendar year, two years ahead of schedule.
