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Briscoe’s share price could rise after posting strong quarterly sales growth

The Briscoe Group Limited (ASX: BGP) share price could be set to climb higher this morning after posting a 4% increase in total group sales in Q2 2019 indicating strength in the New Zealand retail sector.

What were Briscoe’s quarterly highlights?

Briscoe announced unaudited sales for the 13-week second quarter to 28 July 2019 increased 4.05% year-on-year (YoY) to $152.3 million from the $146.4 million achieved in the prior corresponding period (pcp).

Briscoe’s homeware segment increased sales by 2.32% during the period and the sporting goods segment by 7.61% in what looks like a broadly positive result for the group.

On a same-store basis, the group’s sales for the second quarter ended 28 July 2019 were 3.40% ahead of the same period last year.

On a same-store basis, homeware sales increased by 2.32%, while sporting goods sales increased by 5.62% over the second quarter of last year.

What about on a half-year basis?

Group sales for 1H 2019 were $303.0 million, an increase of 3.34% on the $293.2 million achieved for the first six months of last year.

Briscoe’s homeware segment increased sales by 2.57% during this period and the sporting goods segment by 4.68%.

On a same-store basis, the group’s sales for the half-year ended 28 July 2019 were 2.74% ahead of the same period last year.

The same-store calculation adjusts for two Rebel Sport stores opened by the group at Kerikeri (February 2018) and at Papanui, Christchurch (November 2018), and also for the closure of the Living & Giving Store at Riccarton (March 2018).

On a same-store basis, homeware sales increased by 2.72% for the 26 week period while sporting goods sales were 2.76% ahead of last year.

What does this mean for the Briscoe share price?

Given positive increases in sales for Briscoe as a group and in each individual segment, I’d expect the Briscoe share price to climb higher in early trade.

On both a quarterly and half-yearly basis, Briscoe’s retail volumes are trending upward at a time when Aussie retail data has indicated a softening of market conditions.

Briscoe Group is a New Zealand retail chain with 90 retail stores trading under the Briscoe’s Homeware, Living & Giving, and Rebel Sport brand names.

Overall, the positive sales trend could provide a compelling reason to add Briscoe to a portfolio for retail exposure in a growth environment, particularly given the Briscoe share price has climbed just 8.4% so far this year.

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Motley Fool contributor Kenneth Hall 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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