Last week, the ABS released data showing Aussie retail turnover was 1.1% lower in February, with food retail taking the biggest hit. We look at the numbers and how Coles and other ASX retail shares have been performing lately.
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The Coles Group Ltd (ASX: COL) and other retailers received unwelcome news on Friday after the Australian Bureau of Statistics (ABS) released data showing retail turnover was 1.1% lower in February compared to January 2021. Turnover was 8.7% higher, however, when compared to February 2020.
While the release of these statistics is unlikely to have a material effect on the share price of these companies, the numbers are indicative of the trading environment faced by many retailers.
The ABS attributes the fall mainly to COVID restrictions in place in Victoria and Western Australia during the month. Victoria went into a state-wide, 5-day lockdown in mid-February, while the WA government placed the greater Perth metro area in a 5-day lockdown at the beginning of the month. Retail sales were down 4% and 6% in the respective states.
New South Wales and Queensland recorded strong growth rates in the month, which partially offset the national results. Both states had their own COVID restrictions in January. The ABS cites this as a reason for the strong growth in retail in NSW and QLD.
Food retailing was the biggest loser in the month. It fell 3% nationally, and in every state and territory, although it was still 6.5% greater when compared to February 2020. All other industries were mixed.
Until the coronavirus pandemic subsides, retail trading could still be volatile in the near-term.
How the Coles share price has been performing recently
The Coles share price is 1.55% higher today. At the time, shares in the supermarket giant are trading at $15.73. On Friday, Coles announced it would target net zero greenhouse gas emissions for its business by 2050.
In its half-year report for FY21, Coles’ net profit increased 14.5% on the prior corresponding period (pcp) to equal $560 million. This was spurred by an 8% increase in revenue on the pcp, which equated to $20.6 billion. Supermarket revenue was up 7.3% ($17.8 billion), liquor sales were up 15.1% ($1.9 billion) and Coles Express sales were up 10.5% on the pcp ($632 million).
Coles shares have lost 6.26% in value over the last 12 months.
What about other Australian retailers?
Of course, Coles is not the only retailer listed on the ASX. Here’s a closer look at how 4 other popular ASX retail shares have fared.
Wesfarmers Ltd (ASX: WES)
The Wesfarmers share price is up 1.05% at the time of writing and is currently trading at $50.56. The company (which owns brands such as Bunnings, Kmart, and Officeworks) has a market capitalisation of $57.2 billion. If an investor bought shares in it 1 year ago, they would be sitting on a tidy 44.91% return on investment (ROI). The share price, however, is down 10.48% from its 52-week record it achieved in February this year.
In the retailing giant’s half-yearly report for FY21, Wesfarmers reported a 23.3% surge in net profits after tax. Total net profit was $1.4 billion. Revenue increased 16.6% on the pcp to equal $17.8 billion. Earnings before income taxes (EBIT) grew 23.2% to total $2.1 billion.
Wesfarmers paid an interim dividend of 88 cents a share, fully franked. The payment was up 17.3% on the pcp.
Woolworths Group Ltd (ASX: WOW)
The Woolworths share price is up 1.47%. Shares in the Coles archrival are swapping hands for $39.47, presently. The share price is 5.18% lower than this time last year, but 16.53% higher than its 52-week low.
Woolworths’ revenue growth did not quite match Coles during H1 FY21. Its revenue grew 10.5% on the pcp to equal $35.8 billion. EBIT was up 16.7% to equal $2.1 billion. Gross profit leaped 9.4% on the pcp to total $10.5 billion.
The board paid an interim dividend of 53 cents per share, fully franked.
JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi is trading 1.48% lower today, sitting at $51.24 at the time of writing. The ROI on JB Hi-Fi from 12 months ago is 85.86%.
In the electronic and home goods seller’s half-yearly report for FY21, it reported a huge lift in its net profits. The figure was up an astounding 86.2% on the pcp, coming in at $317.7 million. Earnings per share (EPS) went up 86.2% to $2.77.
By brand, revenue was up 23.3% for JB Hi-Fi Australia ($3.36 billion) – this included a 201.9% explosion in online sales ($515.6 million). JB Hi-Fi New Zealand saw sales grow 9.1% (NZ $144.9 million), including a 69.2% growth in online sales (NZ $6.9 million). Finally, The Good Guys brand saw sales lift by 9.1% on the pcp ($1.45 billion). Online sales increased 86.1% for the brand ($148 million). Total EBIT for the Group was up 76% to $462.8 million.
Harvey Norman Holdings Limited (ASX: HVN)
Finally, the Harvey Norman share price is down 0.83% to $5.95 per share. Shares in the company have gained 120.37% in the past year. The company came under fire recently for refusing to pay back $22 million in JobKeeper payments despite profits doubling to $462 million.
For the 6 months ending 31 December 2020, net profits in the multinational retailer grew 116%. Revenue in the company increased by 25.8% on the pcp ($5.2 billion). Earnings before interest, tax, depreciation and amortisation (EBITDA) leaped 76% year-on-year to $779.8 million. EPS leapt 109.5% to 37.08 cents.
The company paid an interim dividend of 20 cents a share, fully franked. That’s the biggest dividend ever paid by Harvey Norman.
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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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