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3 ASX retail shares at record highs

Adairs Ltd (ASX:ADH) and these ASX retail shares have just hit record highs. Here’s why they are scaling new heights on Monday…
The post 3 ASX retail shares at record highs appeared first on The Motley Fool Australia. –

A happy shopper lifts her bags high, indicating a rising share price in ASX retail companies

While the market as a whole has been in fine form in 2021, one area of the market performing particularly strongly has been the retail sector.

For example, since the start of the year, the S&P/ASX 200 Consumer Discretionary Sector (ASX: XDJ) has climbed an impressive 11.1%. This compares to a solid 5.9% gain by the S&P/ASX 200 Index (ASX: XJO).

In light of this, it will come as no surprise to learn that a number of retail shares have been pushing notably higher this year. Some have even managed to climb to 52-week highs or better today.

Here’s why these ASX retail shares are scaling new heights:

Adairs Ltd (ASX: ADH)

The Adairs share price climbed to a record high of $4.60 today. Investors have been fighting to get hold of this homewares retailer’s shares in 2021 thanks to a very strong performance in the first half. For the six months ended 31 December, Adairs reported a 34.8% increase in group sales to $243 million. This was driven by a 20.9% increase in Adairs sales, a 44.4% jump in Mocka sales, and strong online sales growth. And thanks to a significant expansion in its gross margin, Adairs reported a 166% increase in underlying earnings before interest and tax (EBIT) to $60.2 million. This excludes JobKeeper payments, which were returned to the government. Interestingly, just this morning Wilsons tipped the Adairs share price to continue its ascent. It has retained its buy rating and lifted its price target by 29% to $5.80.

Baby Bunting Group Ltd (ASX: BBN)

The Baby Bunting share price reached an all-time high of $6.34 today. The catalyst for its strong share price performance was an impressive performance during the first half and its expansion plans. In respect to the former, the baby products retailer delivered a 16.6% increase in total sales to $217.3 million. This was driven by a 15% increase in comparable store sales and a 95.9% increase in online sales. Pleasingly, due to a 41-basis points expansion in its gross margin, the company recorded a 43.5% increase in pro forma net profit after tax to $10.8 million. As for its expansion plans, after a successful online launch in New Zealand, Baby Bunting now plans to open its first physical store in the country in FY 2022.

Reece Ltd (ASX: REH)

The Reece share price climbed to a record high of $20.34 on Monday. Investors have been buying the bathroom, kitchen, plumbing and HVAC-R supplies company’s shares this year due partly to a solid half year result in February. For the six months ended 31 December, Reece reported a 4% increase in sales revenue to $3,074 million and a 12% increase in normalised earnings before interest, tax, depreciation and amortisation (EBITDA) to $349 million. Positively, with the housing market booming, demand for its offering looks likely to strengthen in the second half.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia has recommended ADAIRS FPO and Baby Bunting. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 3 ASX retail shares at record highs appeared first on The Motley Fool Australia.

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