In morning trade the Noni B Limited (ASX: NBL) share price has been amongst the best performers on the market.
At the time of writing the retailer's shares are up 16% to $2.91.
Why is the Noni B share price storming higher today?
Following a bitterly disappointing trading update from Kathmandu Holdings Ltd (ASX: KMD) last week and research by Citi this week, there have been concerns that retailers experienced their worst Christmas in years in 2018.
This has led to a number of retail shares such as JB Hi-Fi Limited (ASX: JBH), Kathmandu, Lovisa Holdings Ltd (ASX: LOV), and Super Retail Group Ltd (ASX: SUL) thoroughly underperforming the market over the last 30 days.
Noni B's shares have not been immune to this either. Prior to today they were down 9% over the last month, compared to a 4% gain by the ASX 200.
The retailer appears to have attempted to address these concerns this morning by releasing a trading update.
What was in the update?
According to the release, for the six months ended December 31, total sales grew by 140% to approximately $457 million.
This was driven by the acquisition of numerous brands from City Chic Collective Ltd (ASX: CCX) (formerly known as Specialty Fashion) and strong trading during the Christmas period.
Trading was so positive for Noni B that it posted a 1% increase in like for like sales during the Christmas period, which was a vast improvement on previous trading. At the end of October like for like sales were down 5% year to date.
As a result, this meant the company ended the half with a like for like sales decline of 3.1%.
Management also advised that due to improved trading, combined with achieving integration efficiencies from the acquisition ahead of schedule, it expects underlying EBITDA for the first half to be approximately $29 million. This puts it at the upper end of market consensus range of $25 million to $30 million.
Should you invest?
I think this result once again demonstrates the quality of the Noni B business and management's ability to turn around struggling brands and make them highly profitable.
With its shares changing hands at under 12x earnings, I think Noni B would be a great option for investors looking at gaining exposure to the retail sector.
