The S&P/ASX 200 Index (ASX: XJO) has had a difficult run so far this year, tumbling 11% against a backdrop of rising interest rates and soaring inflation.
There are two key ways investors can make money from the share market: capital growth (i.e., share price rises), and dividends.
So, with capital growth taking a back seat amidst the volatility, ASX dividend shares are well and truly in the spotlight.
We know Aussies love their dividends, especially when they are fully franked.
With this in mind, I've rounded up the five highest-yielding ASX retail shares right now with a market capitalisation above $250 million.
Let's check them out.
Peter Warren Automotive Holdings Ltd (ASX: PWR)
To kick things off, ASX car dealership group Peter Warren is currently sitting in fifth place.
After hitting the ASX boards last year, Peter Warren declared maiden dividends in FY22.
The group declared total dividends of 22 cents across the financial year, fully franked, with the final dividend of 13 cents set to be paid on 7 October.
Based on these dividends, Peter Warren shares are flashing a trailing dividend yield of 7.7%. Including franking credits, this yield jacks up to 11%.
JB Hi-Fi Limited (ASX: JBH)
Just edging out Peter Warren for fourth place is the nation's largest entertainment retailer, JB Hi-Fi.
JB Hi-Fi grew its net profit after tax (NPAT) by 8% in FY22, which helped the ASX 200 retail share hike its annual dividends by 10% to $3.16, fully franked.
As a result, JB Hi-Fi shares are currently printing a trailing dividend yield of 7.7%. Throwing in franking credits dials up this yield to 11.1%.
Harvey Norman Holdings Limited (ASX: HVN)
JB Hi-Fi's biggest rival Harvey Norman has pipped it at the post, starting off our podium finishers.
Harvey Norman delivered a marginal dip in profits in FY22. However, this didn't stop the ASX 200 retail share from raising its annual dividends by 7% to 37.5 cents, fully franked.
At current levels, this puts Harvey Norman shares on a chunky trailing dividend yield of 8.9%, which grosses up to 12.7%.
Harvey Norman is the only ASX retailer on this list that is yet to trade ex-dividend. Its fully franked final dividend of 17.5 cents will be on offer until 13 October, before shares turn ex-dividend the following day.
This final dividend alone equates to a dividend yield of 4.1%.
Adairs Ltd (ASX: ADH)
Taking out the silver medal is homewares and furnishings retailer, Adairs.
In FY22, the company struggled to match its record results from the prior year. Cycling strong comparisons, NPAT slid by 30% to $45 million.
While Adairs kept its final dividend steady, it slashed total FY22 dividends by 22% to 18 cents, fully franked.
Nonetheless, Adairs shares are spinning up an eye-catching trailing dividend yield of 9.9%, which is boosted to 14.1% with the addition of franking credits.
Best & Less Group Holdings Ltd (ASX: BST)
Topping this list as the highest-yielding ASX retail share right now is value apparel business Best & Less.
It was a tale of two halves for Best & Less in FY22, battling COVID-19 restrictions and reduced foot traffic in the first half.
Overall, the company's sales backtracked by 6% to $622 million, while NPAT dropped by 13% to $41 million.
In its first year as a listed company, Best & Less declared annual dividends of 23 cents, fully franked.
This means that Best & Less shares are currently trading on a meaty trailing dividend yield of 10.3%. Including franking credits, this yield cranks up to an even meatier 14.8%.
A word of caution
It's important to note these are trailing dividend yields. As such, they reflect what's happened in the past.
And as we're often reminded, past performance is not a reliable indicator of future performance.
This can be especially true in industries such as retail, which are often overly susceptible to the peaks and troughs of the economic cycle.
ASX shares can cut their dividend payments with little to no warning.
So, heed caution on taking trailing dividend yields at face value. It's also important to assess the sustainability of these yields into the future.
