We are almost halfway through reporting season and it could be worth noting some of the strong growth that a few ASX shares are revealing in FY21.
The retail industry in-particular has had a very strong year over the last 12 months with government stimulus and limited other options to spend money.
These two ASX shares reported really strongly:
Baby Bunting Group Ltd (ASX: BBN)
The baby item retailer said that total sales increased by 15.6% to $468.4 million. Online sales jumped 54.2% to $90.8 million.
Pro forma EBITDA (EBITDA explained) grew 29.2% to $43.5 million. The pro forma net profit after tax (NPAT) went up 34.8% to $26 million. Statutory profit, which includes things like business transformation projects and employee equity incentive expenses, soared 76% to $17.5 million.
The gross profit margin grew 83 basis points (0.83%) to 37.1%. This shows that as the business is getting bigger, it’s becoming more profitable for each new revenue dollar. That means the bottom line is growing faster and faster, compared to revenue growth.
The board of the ASX share decided to declare a final dividend of 8.3 cents per share. That brought the full year dividend to 14.1 cents, up 34.1%.
However, the Baby Bunting share price dropped in response. Comparable store sales at 12 August 2021 were down 6.4% for the 2022 financial year to date with the impacts of lockdowns.
Nick Scali Limited (ASX: NCK)
Nick Scali was another business that reported really strongly.
Sales revenue for FY21 grew 42.1% to $373 million. EBITDA surged 92.5% to $84.2 million and underlying net profit after tax (NPAT) doubled (up 100%) to $84.2 million.
There were pleasing profit margin improvements across the board for the company. The gross profit margin improved 80 basis points (0.80%) to 63.5%, the EBITDA margin increased 890 basis points (8.90%) to 33.9% and the EBIT margin increased 940 basis points (9.40%) to 32.7%.
Pleasingly, the online part of the ASX share’s sales are growing rapidly In FY21, online written sales orders jumped $15.3 million to $18.3 million. The EBIT contribution from the online channels increased to $8.8 million, up from $0.6 million in FY20.
The company plans to add more showrooms, grow online sales and continue to become more efficient.
However, written sales orders were down 27% in July 2021 compared to July 2020, but up 24% on July 2019.
This may be a sign, for both of these ASX shares, that the COVID-19 boom of sales won’t be repeated again, but demand remains elevated compared to historical levels.
