The ASX share market has been through a lot of volatility in recent times. This may be opening up opportunities for investors who are looking for lower prices in March 2022.
Businesses that continue to grow their revenue and operations might be potential candidates to consider. A lower share price doesn't necessarily mean the underlying growth is slowing.
With that in mind, these are two ASX shares which are growing but have been sold off:
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Adore Beauty Group Ltd (ASX: ABY)
The Adore Beauty share price is showing a lot of red. The past month shows a 24% decline. It's down 48% since the start of the calendar year, which is less than two months old!
This e-commerce business specialises in the beauty sector. It sells over 11,700 products from over 270 brands.
Despite the sell-off, Adore Beauty continues to report revenue growth. It isn't seeing a decline of its year-on-year numbers like plenty of other e-commerce retailers have.
Half-year revenue was up 18% to $113.1 million, with active customers increasing 13% to 876,000. Returning customers grew 56%. Annual revenue per active customer rose 5% year on year to $224, driven by higher average order values and an increasing proportion of returning customers.
The company is investing in content engagement and brand building. Adore Beauty's growing organic channels are showing early results. The owned market channels are helping marketing costs.
The ASX share is investing in a number of areas including private label products, its mobile app, loyalty and adjacency expansion. It's on track on launch its first private label skincare brand in the fourth quarter. This can help it grow its market share in the $11 billion category which is benefiting from "significant" structural tailwinds. More shoppers are buying their products online.
It's currently rated as a buy by Morgan Stanley, with a price target of $4. That's almost 90% higher than where it is today.
City Chic Collective Ltd (ASX: CCX)
City Chic is one of the world's leading retailers of plus-size clothing for women. It operates through several brands including City Chic, Evans in the UK and Avenue in the US.
The City Chic share price is down 28% since the start of the year. It's close to a 52-week low, with that lower price being back in March 2021.
The ASX share recently reported its FY21 half-year result which showed 49.8% growth of revenue to $178.3 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was up 1% to $23.5 million and underlying net profit was flat. Online sales surged 52.5%. The company suffered from lockdowns and store closures in the first half.
City Chic has global growth ambitions. It's launching its different brands into different geographic markets to deliver growth. It's also making acquisitions, such as the Navabi deal in July 2021 to help it grow in Europe.
The first couple of months of the second half of FY22 showed ongoing revenue growth, with online sales growth. The UK and EU sales are showing signs of recovery and they are getting closer to pre-acquisition levels.
With its partner business, it's planning to launch new programs and launch new ranges with existing partners, as well as onboard new partnerships in the second half of FY22 and into FY23.
The ASX share is maintaining elevated stock levels to ensure it has enough stock for the summer sales period in the northern hemisphere.
It's currently rated as a buy by UBS, with a price target of $5. That's around 27% higher than it is today.
