Here is the top 7 ASX retail shares for 2020. We cover Redbubble, Temper & Webster, Kogan, Eagers, Accent, Wesfarmers, and Jb Hi-Fi
The post These are the 7 best ASX retail shares in 2020 appeared first on The Motley Fool Australia. –
The COVID-19 pandemic has changed the landscape for many ASX retail shares in 2020, with many stores forced to close while lockdown restrictions were in place.
But as one door closes, another often opens, as it did for some retailers, in the form of e-commerce.
Unsurprisingly, we’ve seen e-commerce boom this year, as people shifted their shopping habits from brick-and-mortar stores to online.
On that note, let’s take a look at the 7 top performing ASX retail shares of 2020 so far.
|Company||1-year share price increase||Current share price||Market capitalisation|
|1. Redbubble Ltd (ASX: RBL)||525%||$6.32||$1.7 billion|
|2. Temple & Webster Group Ltd (ASX: TPW)||360%||$10.34||$1.2 billion|
|3. Kogan.com Ltd (ASX: KGN)||152%||$18.38||$1.9 billion|
|4. Eagers Automotive Ltd (ASX: APE)||39%||$13.96||$3.6 billion|
|5. Accent Group Ltd (ASX: AX1)||25%||$2.25||$1.1 billion|
|6.Wesfarmers Ltd (ASX: WES)||22%||$51.49||$57.9 billion|
|7. JB Hi-Fi Limited (ASX: JBH)||12%||$47.23||$5.36 billion|
Redbubble is the clear winner on this list, with its share price gaining by a mammoth 525% for the year. This means if you had invested $1,000 in Redbubble a year ago and held on to your shares, your money would be worth over $6,000 today.
The Redbubble share price gain is even more remarkable considering the company’s shares were as low as 40 cents back in March when the pandemic was just starting to make its financial impact known. If you had invested your money in Redbubble shares in March instead, that return would be a staggering 1,480%.
The gain in the Redbubble share price has been on the back of very strong performance after the initial market panic. In the company’s latest quarterly update, it reported a 562% increase in accessories sales, driven mostly by increased demand for trendy face masks.
Redbubble floated on the ASX back in 2016 but has been around since 2006, when it was founded in Melbourne.
Temple & Webster
The furniture and homewares retailer is another company that benefitted from the pandemic-induced lockdowns.
The Temple & Webster share price rose by 360% in one year. It was trading at $4.18 before the onset of the COVID-19 crash, and fell all the way to $1.57 on 23 March.
The company’s e-commerce business then started to take off during the period of lockdown restrictions, and by the end of April, second half revenue had grown by 74% year on year to date.
That growth continued throughout the rest of FY20. In the company’s final FY20 result, Temple & Webster reported that full year revenue grew 74% to $176.3 million.
The company said it played its part in helping Aussies set up their homes to deal with the impacts of the crisis. Management believes that many people who may not have shopped for their furniture and homewares online before are experiencing the benefits of the channel, including convenience and value.
Kogan is another major, pure e-commerce player that has had a fantastic 2020, with its share price gaining over 150% in twelve months.
The Kogan price share performance is a reflection of the company’s strong results in FY20, when it saw net profit grow by 55.9% and gross sales increase by 39.3%.
What’s interesting about Kogan is that it’s been able to increase its gross margins year on year since FY17. The company’s gross margin was 17.9% in FY17, 19.5% in FY18, 20.7% in FY19 and 25.4% in FY20.
Kogan is always on the lookout to diversify its earnings, acquiring brands such as Matt Blatt Furniture and Mighty Ape this year.
Many investors might not be too familiar with this share, but Eagers Automotive packs a good punch when it comes to offering customers new and used motor vehicles. The company has a long and proud history that extends over 100 years, and currently has over 250 locations throughout Australia and New Zealand.
The Eagers share price has done extremely well this year, gaining by 39%, as people changed their commuting habits and avoided public transportation.
In its latest guidance to the market, Eagers said it expected to deliver an improved full-year result. The company announced that underlying operating profit before tax is estimated to be in the range of $195 million to $205 million, compared to the $100.4 million achieved in the prior corresponding period.
If it turns out the pandemic alters some commuters’ mode of transport preferences longer term, who knows where the Eagers share price will be one year from now.
Here’s another share some investors may not have heard about, but which has performed tremendously this year.
Accent is a footwear retailer that holds the license for some hugely popular shoe brands such as Dr Martens, Saucony, Skechers, Timberland, and Vans among others. It also owns the Athlete’s Foot, Platypus and Hype DC retail outlets.
The Accent share price has returned 25% for investors this year, after dropping by 70% in March.
Accent shares surged during lockdowns as consumers changed their habits and increased their focus on personal fitness. The company’s digital business grew significantly this year as consumers also shifted to online shopping in droves.
Accent recorded a 129% increase in sales compared to the same period last year.
Also growing is the company’s store network. Despite the pandemic, Accent is on track to open approximately 80 new stores in FY2021. This includes new concept stores, such as Stylerunner.
The conglomerate is perhaps the odd one out in this list, as the diversity and size of its business means it’s not a pure retail player.
Nevertheless, the Wesfarmers share price is one to envy this year, reaching its all time high of $51.91 earlier this week.
The company’s success has been underpinned by strong sales from its retail network. This is especially true of its Bunnings business, which has continued to grow its sales in comparison with pre-coronavirus levels.
Wesfarmers reported that Bunnings continues to deliver strong sales in FY21, up 25.2% over the prior corresponding period.
The company’s Kmart and Officeworks businesses also performed well despite widespread store closures, delivering sales growth higher than the prior corresponding period.
These solid results were supported by strong demand for home office and furniture products.
Last but not least, is the JB Hi-Fi share price, which has returned 12% in one year.
Most people are probably familiar with this home entertainment retailer. The flagship brand, along with its other brand, The Good Guys, has returned positive results this year as more people purchased home entertainment products.
In its FY20 results, the company reported group net profit after tax (NPAT) of $332.7 million, up 33% from the prior year.
It will be interesting to watch how the JB Hi-Fi share price performs once the economy fully reopens, and people get back to working in the office.
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Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Accent Group, Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.