Investors with room for some new portfolio additions, might want to check out the ASX stock picks listed below.
That's because Macquarie Group Ltd (ASX: MQG) has named them as its top three picks in the consumer sector.
Let's see what the broker is recommending to clients right now:
Nick Scali Limited (ASX: NCK)
The broker's top ASX stock pick in the consumer sector is furniture retailer Nick Scali.
Macquarie likes Nick Scali due to its attractive valuation and strong earnings growth outlook. The latter is expected to be driven by improvements in gross margins both in Australia and the UK. It explains:
NCK have guided to a further 8 Fabb Furniture stores to be converted to Nick Scali branded stores in the UK. This is expected to cause increased short term losses in 2H25 compared to 1H25. […] We forecast 14% EPS CAGR between FY25-28e, driven by an expected recovery in ANZ GM%, an improved UK GM% and strong sales growth in the UK following store refurbishments. While we expect 2H25e to be impacted by losses in the UK, we see upside to VA consensus on GM% in the UK. Potential for further store openings in the UK would provide upside to current forecasts.
Macquarie currently has an outperform rating and $19.90 price target on its shares.
Universal Store Holdings Ltd (ASX: UNI)
Second on the list is youth fashion retailer Universal Store. Macquarie has named it as a top ASX stock pick due to its strong earnings growth outlook.
This is being underpinned by new store openings and further market share gains. The broker explains:
We forecast ~9% EPS CAGR between FY25-28e, driven largely by top-line growth. We expect sales to be supported by ongoing store openings, and store re-locations into key locations. We expect further market share gains from ongoing issues with key competitors. We expect modest EBIT margin expansion from FY25e, further supporting EPS growth.
The broker currently has an outperform rating and $9.80 price target on the company's shares.
Lovisa Holdings Ltd (ASX: LOV)
Finally, in third place is fashion jewellery retailer Lovisa.
Macquarie believes it is well-placed to deliver earnings growth in the high teens over the coming years. This is expected to be driven by a combination of new store openings and modest like for like sales growth. It explains:
We forecast ~19% EBIT CAGR between FY25-28e, driven largely by top-line growth (revenue CAGR of ~13%) with further support expected from EBIT margin expansion. We expect sales to be supported by ongoing store rollout with modest LFL sales growth forecasted. We expect EBIT margin expansion to be largely supported by lower STI/LTI payments (new CEO incentives).
Macquarie currently has an outperform rating and $33.40 price target on Lovisa's shares.
