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Date : 05/04/2023

3 ASX Retail Stocks That Investors Should Shop in 2023

In the world of ASX retail stocks, prices are set, and fortunes are made! But things have gotten intriguing lately. These companies may control their prices, but they’re feeling the squeeze from two powerful forces: the slowing of online sales and four decades of high inflation. These factors make it harder for them to get the goods they need to sell, impacting their profits.

But don’t despair just yet! This challenging climate is okay news for investors. In fact, we’ve identified some of the best ASX retail stocks for 2023, and we’re confident that they’ll continue to thrive despite their challenges. These companies have proven themselves strong performers, and we’re excited to see what they’ll do in the future. So hold onto your hats, investors – the world of ASX retail stocks is always full of surprises!

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Wesfarmers (ASX: WES)

Wesfarmers, the big kahuna of the Australian Stock Exchange! This company is a retail powerhouse; they don’t just specialize in chemicals and fertilizers. They’ve got their fingers in various pies, including some of our favourite brands like Kmart and Bunnings. These stores are a godsend for budget-conscious shoppers, and they’re only getting more popular as times get tougher.

It’s no wonder that Wesfarmers is doing so well. In the first half of FY23, they raked in a whopping $22.6 billion in sales, up 27% from the previous year. And their profits? A cool $1.4 billion, up 14%. That’s some serious cheddar.

Moreover, the good news keeps coming. Analysts predict that in FY24, Wesfarmers will see sales of $43.2 million (up 1%), EBITDA of $5.7 billion (up 3%), and earnings of $2.25 per share (up 4%). It might not be the fastest-growing company, but they’re still in a great position to keep growing.

And what about that dividend yield of 3.76%? It might not beat inflation, but investors needn’t worry about Wesfarmers cutting or eliminating their dividends anytime soon. This is a company that knows how to take care of its shareholders. So if you’re looking for a solid investment in the retail space, you can go right with Wesfarmers.

asx wes shares

JB Hi-Fi (ASX: JBH)

JB Hi-Fi is the go-to spot for all things electronic! This company operates their namesake stores and the Good Guys, where you can find all sorts of appliances. And let me tell you, they were on fire during the pandemic! With everyone setting up their home offices, demand for their products went through the roof.

But even though things have calmed down a bit, JB Hi-Fi is still strong. After all, consumers always need electronics, and they’re constantly upgrading to the latest and greatest models. In FY22, JB Hi-Fi brought in a whopping $9.2 billion in revenue (up 3.5%), and their net profit was $544.9 million (up 7.7%). Not too shabby, right?

And things are looking good for 1HY23 as well. Sales were up 8.6% to $5.3 billion, and the company made a net profit of $330 million (up 14.6%). Sure, consensus estimates expect a slight dip in FY24, but revenue is only expected to drop by 4%. That’s pretty good, considering the current economic climate.

But here’s the real kicker: JB Hi-Fi has been a generous dividend payer of late, with a yield of over 8%! That’s a pretty sweet deal if you’re looking for a solid investment in the retail space. So if you’re in the market for new electronics or appliances, why consider investing in JB Hi-Fi? They’re a company that’s sure to keep on delivering.

asx jbh shares

Universal Store (ASX: UNI)

Universal Stores is the go-to destination for young and trendy fashion! You might think that younger consumers would have less money to spend, but that certainly has yet to be the case for this company. In fact, despite the stereotypes, Universal Store has been performing quite well.

Sure, their FY22 results could have been better, with total sales falling 1.4% and underlying NPAT dropping 30.6% to $21.1 million. But 1HY23 was a different story altogether. The company experienced a whopping 35% growth in sales and a 32% increase in NPAT. That’s pretty impressive!

And here’s something sure to please investors: Universal Store is pivoting to selling its brands. By doing so, they can improve their margins and make more money. Their flagship brand, Perfect Stranger, accounts for 16% of sales and has a dedicated store at Sydney’s Warringah Mall.

While the company has been hesitant to provide guidance to shareholders, consensus estimates call for good growth in FY24. Specifically, analysts are predicting 12.7% revenue growth and 11.4% EBITDA growth.

And let’s remember that impressive 5.6% dividend yield, which may not quite beat inflation but is still quite impressive for an ASX retail stock in today’s economic climate. So if you’re looking for some trendy fashion that won’t break the bank, and a company that’s showing promise in the retail space, look no further than Universal Store.

asx uni shares

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