With a general upbeat mood, most of the retailers were seen to surge up on ASX on November 07, 2017. Following is a look at three names in the industry.
 

Super Retail Group Ltd

SUL Details

Focusing on efficiencies: Super Retail Group Ltd (ASX: SUL) recently reported that their financial year performance is tracking as expected. But the like for like sales growth was under pressure impacted by consumer environment. This dampened the stock sentiment which lost over 11.1% in the last three months (as of November 06, 2017). On the other hand, the group continued to focus in supply chain efficiencies while their sales performance in Supercheap Auto was strong in Australian states and New Zealand. Their sales performance was strong as their Sports team has been focusing on integrating the Amart Sports business under the Rebel brand. The conversion of the former Amart Sports stores is almost finished. The group expects to open up to ten new stores in the Auto Division while refurbish up to 44 stores. In the Leisure Division, SUL forecasts to open three new BCF stores and one new Rays store. In the Sports Division, they forecast to open three new Rebel stores.
 

Performance for 16 weeks to 21 October 2017 (Source: Company reports)
 
The group expects to incur over $120 million on store development, refurbishment program and Amart Sports store conversions to Rebel. We believe the recent correction in the stock placed them at decent levels; and with positive sentiments on the sector, the stock moved up 2% on November 07, 2017. Given the mix of performance and level of competition while SUL’s return on equity is higher than the industry average, we put a “Hold” recommendation on the stock at the current price of $7.76



SUL Daily Chart (Source: Thomson Reuters)

 
JB Hi-Fi Ltd 

JBH Details

Weak performance for New Zealand business: JB Hi-Fi Ltd.’s (ASX: JBH) New Zealand total sales were under pressure and fell 0.3% to NZD234.0 million for FY17, while comparable sales fell 8.8%. On the other hand, Australia sales were up 10.9%. For FY18 year to date performance, the group’s overall sales rose 6.2% which is at a lower growth rate as compared to the 14.3% rise in the prior corresponding period. Moreover, their comparable sales growth was 3.2% in FY18 year to date against 10.0% in pcp. The sales slowdown in the month of September and October reflected changes in business cycle with regards to product releases. The stock has also been battered owing to the rising competition in the domain. It will be crucial to see how the retailer sets for the Christmas trading while we give an “Expensive” recommendation on the stock at the current price of $22.55



JBH Daily Chart (Source: Thomson Reuters)
 

Harvey Norman Holdings Ltd

HVN Details

Concerns over competition: While most of the retailers moved up, Harvey Norman Holdings Ltd.’s (ASX: HVN) stock slipped by 2.4% on November 07, 2017 and corrected over 15.9% in the last three months (as of November 06, 2017) on concerns over the potential competition from Amazon.com. ACCC is pursuing to give a clearance for offering huge discounts when they enter the Australian market. On the other side, the group’s Harvey Norman’s largest franchisee, Harvey Norman Commercial Division – NSW (HNCD) signed an agreement to promote and sell Quantify technology products into commercial and residential development projects throughout ACT and NSW. Formal distribution as well as the supply agreements were finalized between the two parties. This deal would expedite the Quantify Technology’s commercialization efforts. The deal would also enable Quantify Technology to have additional and extensive Australia-wide commercial possibilities. Harvey Norman was otherwise seen to move up lately owing to a reprieve from ASIC investigation. Despite the group’s efforts to revamp growth track, we believe Amazon entry could be a major threat to the group’s business in the coming periods. Given the volatility and rising competition, we rate the stock as “Expensive” at the current price of $3.68


HVN Daily Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.