The outdoor adventure clothing and equipment retailer, Kathmandu, today reported a spectacular 14.3% increase in like-for-like sales for the 15 weeks to 11 November 2012. Total sales rose 19.5% to $66.9 million, with the opening of six new stores around Australia, and the company aims to open a total of 15 new stores in the 2013 financial year.

Kathmandu's Chief Executive officer, Peter Halkett said that despite the difficult trading conditions, sales have been ahead of expectations. However, he added that sales to date are less than 20% of our expected total sales for the year, and that the retailer was heavily dependent on the Christmas and January trading period. The announcement also made no mention of margins, so its hard to determine how much of the increase in sales was due to discounting.

Just yesterday, Country Road Limited (ASX: CTY) announced that sales for the group in Australasia increased by 37%, while same-store-sales increased by 12.2%. At the other end of the scale, Gazal Corporation (ASX: GZL), a fashion wholesaler, with brands like Pierre Cardin, Calvin Klein and Bisley, yesterday reported that consumer sentiment and business confidence remained cautious, and trading results for the first four months have been challenging, and the company was unable to make any predictions in relation to earnings for the 2013 financial year.

Last week, Speciality Fashion Group (ASX: SFH) reported that sales since July had been encouraging, with the company recording low single digit same-store-sales growth, but remained cautious.

The Foolish bottom line

For the majority of retailers, the next two months are the most important of the year. But results so far seem to indicate that the sector is seeing a turnaround, and could see strong sales leading up to  Christmas and into the New Year.

As a part owner of Billabong International (ASX: BBG) and David Jones Limited (ASX: DJS), I'm getting cautiously excited.

If you only invest in one company this year, make it our "Top Stock for 2012-13". Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

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Motley Fool writer/analyst Mike King owns shares in Billabong and David Jones. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Kathmandu sales climb appeared first on The Motley Fool Australia.

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Australia's upmarket department store, David Jones Limited (ASX: DJS) has seen its share price fall more than 50% since 2009. Three years of falling revenues, profits and dividends and an uncertain outlook can do that.

The reasons for the falls are many.

The company has been losing sales to online stores and international retailers that have set up shop here, and David Jones' has been slow to embrace online shopping. Weak consumer confidence and a willingness to save rather than spend have compounded those issues to hit not just David Jones, but other fashion retailers like Premier Group (ASX: PMV) and Speciality Fashion Group (ASX: SFH).

The company's alliance with American Express changes in 2014, which will result in earnings for its financial services division halving. 75% of spending on David Jones American Express cards now occurs outside David Jones stores, and the company's financial services division contributes around a third of total earnings.

The best time to buy is often when a sector is on the nose and shareholders are running for the exits. Many investors expect recent results to continue into the future, and can't see a change in the company's fortunes. Most of the time they are right, but occasionally they can get it wrong.

So, what's to like?

The first step in fixing a problem is admitting there's a problem in the first place. Management have admitted they've taken their eyes off the ball, and have put in place plans to reverse the fall in profits. As an example, no less than five initiatives are underway to increase revenue generated by the financial services business.

The company is finally revamping its online site and ramping up the number of items for sale from 9,000 to 90,000 by Christmas, as well as launching a new online shopping site in early 2013. Severe staff cuts in previous years are being reversed, as the company increases the number of customer service staff. David Jones is also opening more mini shops in parts of its stores to companies like OrotonGroup Limited (ASX: ORL).

Additionally, automation of some previously manual tasks, introduction of new exclusive brands and a host of other improvements should see the company improve its service and offerings, cut costs and bring customers back in-store.

David Jones is also rolling out smaller format stores into fashion districts in our major cities that don't already have a shopping mall, and which by all accounts, have been very successful so far.

Risks

The company has $136 million in debt, against $730 million of tangible assets, including its four premium properties in the heart of Sydney and Melbourne, recently valued at $612 million. As such, that should limit the downside risk.

As for upside risk, David Jones still faces threats from online retailers, as well as international retailers setting up in Australia, like H&M, Top Shop and Zara. A resurgent Myer Holdings (ASX: MYR) could also be a threat, as well as the current weak retail environment.

The biggest risk though, is that despite all the company's plans to turn the business around, it's unable to attract enough shoppers to grow its revenues, is unable to keep down costs and materially increase its profits. Very few turnarounds turn.

However, David Jones faced similar issues in 2002/2003 and managed to turn things around, with earnings per share growing by an average 38% over the next three years. Of course, we can't assume that history will conveniently repeat itself. I'd settle for half that growth.

The Foolish bottom line

The results the company achieves in 2013 will go a long way to indicating whether the company has managed to achieve the goals it has set for itself. David Jones has set itself a goal of increasing earnings in the 2014 financial year above 2013, despite the effect of the 50% fall in earnings from its Amex alliance in 2014. If the company can achieve that, we could see a share price far north of its current price.

If you only invest in one company this year, make it our "Top Stock for 2012-13". Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

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Motley Fool writer/analyst Mike King owns shares in David Jones. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why I recently bought David Jones appeared first on The Motley Fool Australia.

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Households around Australia have been receiving carbon tax assistance packages since mid-May, and now it looks like we know what those funds have been used for.

Record car sales too

In a report in today's Australian Financial Review, June was a record month for new car sales, with more than 110,000 vehicles sold for the first time ever, thanks to end of financial year sales. SUV (4WDs) sales are up 33% compared to last year – which should be excellent news for 4WD accessories manufacturer ARB Corporation Limited (ASX: ARP).

Together with increasing retail sales, building approvals and rising house prices, growth in Australia looks like it has picked up. It's another reason for the RBA to keep interest rates on hold for the foreseeable future — not that I'm predicting anything!

The Australian dollar also lifted on the news to a new two-month high of 103.3 US cents.

Some commentators have been forecasting doom and gloom for our economy, with no-end in sight. That's easy enough to do, looking at the last few months, or even a year or two, and extrapolating that view far into the future.

Markets go through cycles, both down and up — this market looks like it's recovering, and proving those commentators wrong.

Today's retail winners

Most discretionary retailers have seen their share prices rise today, with Noni-B Limited (ASX: NBL) the best performer, up over 5.3% to 70 cents, just before market close.

Speciality Fashion Group Limited (ASX: SFH) was up 2% to 52 cents, with Myer Holdings Limited (ASX: MYR) rising 2.4% and David Jones Limited (ASX: DJS) up 2.2%.

Premier Investments Limited (ASX: PMV) is currently flat.

Foolish takeaway

Housing and retail are two of the sectors (along with the media sector) that were showing the most signs of weakness. For these two sectors to pick up is a good sign for Australia's economy.

If you're in the market for some high yielding ASX shares, look no further than our "Secure Your Future with 3 Rock-Solid Dividend Stocks" report. In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

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Motley Fool writer/analyst Mike King doesn't own shares in any company mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Retail sales higher than expected – Is the economy turning? appeared first on The Motley Fool Australia.

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Three ASX Industrials stocks rose more than 10% last week.

Tissue Therapies Limited (ASX: TIS) jumped by 28.6% to close at 56.5 cents on Friday. The company develops products to aid wound healing and tissue regeneration. Its main product, VitroGro, is due to go on sale in Europe in June 2012. The company was hit with a 'speeding ticket' by the ASX last week due to the share price moves, but had no light to shed on the matter. (This is the colloquial term given to an ASX query as to whether the company knows anything that could explain a big change in the share price).

With a market capitalisation of just $95m, it's too small for most fund managers, and only covered by one major broker analyst. Investors are likely expecting good news from the company shortly, and are stocking up (excuse the pun!) before any announcement.

Jumbo Interactive Limited (ASX: JIN) moved 12%, to close at $1.40 for the week. The stock moved sharply this week, rising to over $1.60 on Wednesday 2nd May, before falling by 4 cents on Thursday and 8 cents on Friday.  The company released a profit upgrade for the current financial year on Wednesday and is now expecting net profit to be between $5.9m and $6.2m.

Jumbo also announced that the recent $50m OzLotto lottery jackpot drove sales in April. Tonight's $70m jackpot will give May a strong start – big jackpots drive ticket sales. If the lottery is not won today, it could jackpot even higher.  This would be good news for the company.

Remember that volatility is your friend, as it provides opportunities to take advantage of fear and pessimism, and allows investors to pick up shares at cheaper prices. The pull back at the end of last week could be just such an opportunity with Jumbo Interactive.

Specialty Fashion Group Limited (ASX: SFH) moved 5 cents to close up 11.4% at $0.49 per share. Given the company has not released any news in over a month, the price rise looks more like investors taking advantage of the prices on offer.

Other notable risers for the week include Redflex Holdings (ASX: RDF) up 9.7%, CTI Logistics (ASX: CLX) up 9.7%, and Gale Pacific Limited (ASX: GAP), a company I wrote about in this article back in March 2012, was up 9.6% for the week, and up 16% since March.

If you're looking in the market for some high yielding ASX shares, look no further than "Secure Your Future with 3 Rock-Solid Dividend Stocks". In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

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Motley Fool contributor Mike King owns shares in Jumbo Interactive. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691).

The post 3 ASX stocks that jumped over 10 per cent last week appeared first on The Motley Fool Australia.

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