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Are these top retail shares in the buy zone?

A number of retailers including the likes of JB Hi-Fi Limited (ASX: JBH) and Myer Holdings Ltd (ASX: MYR) have struggled over the last 12 months, but I wouldn’t let that put you off the sector.

Despite the impact of low wage growth, changes to consumer habits, and subdued consumer sentiment, some retailers have continued to thrive.

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

Kathmandu Holdings Ltd (ASX: KMD)

This adventure clothing and equipment company has been an impressive performer this year. After a few mixed years culminating in the closure of its UK business, Kathmandu has bounced back with a bang. This year the company expects to deliver net profit after tax of between NZ$48 million and NZ$52 million, up from NZ$38 million in FY 2017. This has been driven by strong sales growth and improvements in its margins. In addition to this improved performance, the company raised NZ$40 million earlier this year to fund the acquisition of Oboz Footwear. This will give the company a foot in the massive North American market. If this proves successful then I expect it could lead to its shares pushing notably higher.

Lovisa Holdings Ltd (ASX: LOV)

Another retailer that has its eyes on the U.S. retail market is this fast fashion jewellery company. Last year the company opened a store in California to test the waters. I’m optimistic that this expansion will be a big success, giving the company a significant runway for growth. However, it isn’t just the U.S. that Lovisa has its eyes on. The company has successfully rolled out its stores in a number of countries including the UK, Singapore, South Africa, and Malaysia. So much so, approximately 53% of its store network is international now.

Noni B Limited (ASX: NBL)

Noni B is a fashion retailer that I think would be a great option for investors. In February the company reported a 35.1% increase in first-half revenue to $193.2 million and a sizeable 379.5% lift in first-half profit to $11.8 million. Thanks to its track record of turning around the performance of underperforming brands, I think its recent acquisitions from Specialty Fashion Group Ltd (ASX: SFH) could lead to further strong profit growth in FY 2019 and beyond.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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