Media Updates, page-4167

This afternoon's Australian Business section
UBS names best retail picks

Investors in discretionary retail stocks should be relieved by the breakdown of the December retail sales data, according to UBS analyst Ben Gilbert.

Despite a worse-than-expected 0.5pc fall month-on-month, he notes that discretionary retail sales growth saw a “notable improvement” to 2.9pc year-on-year from 2.7pc year-on-year in November.

“The key concern for the market was pull-forward of sales from Black Friday/Cyber Monday,” Mr Gilbert says. “This has not happened, with accelerating sales growth in electrical, furniture, and apparel in December.”

He notes that department stores and footwear sales growth remained “solid” despite a slight fall, while hardware was the only consumer discretionary category that declined.

“Overall, the results are consistent with industry feedback of solid trading over Christmas with margins, in our view, okay,” Mr Gilbert adds.

“The risk however are 2H trading updates, with our industry feedback suggesting weakness across the board for January.”

His key picks into 1H20 results are: Adairs, Harvey Norman, Myer, Premier Investments and A2 Milk.