A tough day for the majority of discretionary retailers with JB Hi-Fi (JBH) -4.54%, Super Retail (SUL) -5.45%, Temple & Webster (TPW) -17.91%, Baby Bunting (BBN) -23.42%, Premier Investments (PMV) -3.42%, Harvey Norman (HVN) -3.84%, Lovisa (LOV) -0.93% and Nick Scali (NCK) -4.54% all getting sold off after a couple of underwhelming sales updates put a cloud over the sector. JBH said 3Q comparable sales fell 0.3% YoY, SUL reported a 1% decrease in like-for-like sales for weeks 27-43 in FY24, while Baby Bunting said comparable sales slid 7.7% to the end of April. Cost of living pressures to blame as persistently high interest rates start to bite in a delayed fashion as savings are depleted. While the weakness in sales has sent stocks lower, we’re surprised by the magnitude of some of the declines given the softness in the data of late should in theory at least, have meant some of this was already priced in.
- Some of the moves in consumer discretionary look overdone, and we’ll dig our way through these in more detail tomorrow morning, with a particular focus on JBH, as we’re looking to add it to our Growth Portfolio.
MM is now interested in consumer discretionary stocks
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