Stocks’ Details
 

Kathmandu Holdings Ltd

Trading Update & Profit guidance for FY 18:  Kathmandu Holdings Ltd (ASX: KMD), which runs the retail stores for travel and adventure outdoor apparel and equipment, expects FY18 EBIT to be in the range of $72 to $77 million compared to $57 million last year and NPAT is expected to be in the range of $48 to $52 million compared to $38 million last year. This projection is based after $2.0m Ob?z acquisition transaction costs.


Same store sales results up to 24^th June 2018 (Source: Company Reports)
 
Moreover, KMD’s sales, year to date to 24 June 2018, grew 7.7% above last year. The company’s gross profit margin is 240 bps (2.4%) above last year driven by improved full price sell through, and a higher average selling price. On the other hand, KMD stock has risen 16.26% in three months as on August 03, 2018  and is trading at a P/E of 15.44x. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 2.860.
 

KMD Daily Chart (Source: Thomson Reuters)
 

Retail Food Group Ltd

Capital Management & FY 18 Outlook: Retail Food Group Ltd (ASX: RFG), the embattled global food and beverage company, saw its stock falling 54.35% in three months as on August 03, 2018. RFG’s lenders have now agreed to waive testing of the financial covenants as per the company’s senior debt facilities with respect to the period ending 30 June 2018. However, RFG will be subject to additional reporting obligations. On the other hand, RFG expects FY18 underlying NPAT to be approximately $34.5 million and statutory NPAT to be a loss of approximately $87.6 million, after taking account of the substantial impairment charges recorded at 31 December 2017. Meanwhile, RFG was removed S&P/ASX 200 Index, effective from June 18, 2018 as per June Quarterly Rebalance of the S&P/ASX Indices. We maintain a “Hold” recommendation on the stock at the current price of $ 0.420 while the group’s dividend yield looks inflated given the weak performance over the past one year and many profit downgrades and business driven challenges.
 

RFG Daily Chart (Source: Thomson Reuters)
 

Myer Holdings Ltd

Strong online sales in the third quarter 2018: Myer Holdings Ltd.’s (ASX: MYR) stock continued to rise 5.9% on August 03, 2018 with positive data released by the Australian Bureau of Statistics on retail sales for the month of June. On the other hand, for the third quarter 2018, MYR has reported 2.7% fall in the total sales to $635.3 million and on a comparable store basis, the sales have fallen 3.1%. As a result, the total year to date sales fell 3.4% to $2,355.0 million and the total sales fell 3.0% on a comparable store basis. However, in the third quarter, the online sales have grown 49.4% to $35.9 million and online sales year to date have grown 49% to $141.1 million. Meanwhile, MYR stock has risen 35.44% in last one month as on August 03, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 0.535.
 

MYR Daily Chart (Source: Thomson Reuters)
 

Super Retail Group Ltd

Trading and Strategy Update: Super Retail Group Ltd.’s (ASX: SUL) profit performance was in line with the company’s expectations as at April 2018 updates. The company updated about its three businesses, in which Supercheap Auto was performing strongly driven by its focus on customer experience, digital engagement and extension of services. However, BCF’s sales performance was affected by differing weather conditions across the country during February and March with like for like sales in New South Wales growing by 6.5% in half year while the same fell by 4.5% in Queensland. Further, Rebel is building momentum as the business integrates the former Amart Sports stores and optimises the ranging and inventory across all stores. The business is on track to fully deliver the synergy benefits from integrating the Amart Sports business into Rebel in FY 19.
 

Sales growth compared to prior comparative period (Source: Company Reports)
 
Additionally, SUL has acquired Macpac and the business is expected to contribute circa $5 million to Group EBIT in the balance of the FY 18. For FY 18, Group EBIT margin (excluding 3 months contribution from Macpac) is expected to be in line with the prior comparative period and capital expenditure is expected to be of circa $100m. As a result, SUL stock has risen 16.25% in three months as on August 03, 2018 but has fallen 4.35% in last five days, and is trading at a P/E of 17.43x. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 8.800.
 

SUL Daily Chart (Source: Thomson Reuters)

 
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