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3 top retail shares that could beat the market in FY 2019

Low wage growth, changes to consumer habits, and subdued consumer sentiment have resulted in tough trading conditions for many retailers.

While some retailers such as JB Hi-Fi Limited (ASX: JBH) and Myer Holdings Ltd (ASX: MYR) have struggled, others continue to thrive.

Three retail shares at the top of their game right now are listed below:

Afterpay Touch Group Ltd (ASX: APT)

I think that this payment solutions company could be a great option for investors looking to get exposure to the retail sector. However, I feel that a lot of success from its United States expansion has already been built into its share price. While I do think the Afterpay platform will succeed in this market, failure to do so would almost certainly lead to its share price crashing lower. The risk/reward on offer is enough for me, but those with a low tolerance for risk might want to look elsewhere.

Lovisa Holdings Ltd (ASX: LOV)

Another retailer that has its eyes on the lucrative U.S. retail market is this fast fashion jewellery company. I have been very impressed at the success the company has had with its international expansion thus far. If it can replicate this success in the United States then I see no reason why its store network couldn’t more than double in size. Like Afterpay, I feel at least some success in the United States has been priced into its shares right now. This could make it worth waiting until its results release in August to see how its expansion is tracking.

Noni B Limited (ASX: NBL)

Noni B has been a real favourite of mine over the last couple of years. Pleasingly, it has lived up to my expectations and more. In February the women’s fashion retailer reported an impressive 35.1% increase in first-half revenue to $193.2 million and a staggering 379.5% lift in first-half profit to $11.8 million. I think the niche market the company‘s core business operates in is a lucrative and growing one, which is unlikely to be disrupted by online retailers such as Amazon or ASOS. Furthermore, recent acquisitions have diversified its product offering and could lead to further strong profit growth in FY 2019.

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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 AFTERPAY T FPO. 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.