The Shaver Shop Group Ltd (ASX: SSG) share price is currently up around 2% after the retailer released a trading update.
Shaver Shop has 121 stores across Australia and New Zealand. It sells male and female personal grooming products like electric shavers, clippers, trimmers and wet shave items. It wants to be the market leader in ‘all things related to hair removal’. But it also has products relating to oral care, hair care, massage, air treatment and beauty categories.
FY22 trading update
The trading update is for the period of 1 July 2021 to 7 November 2021. It said that it has experienced significant volatility in trading performances due to COVID lockdowns across Victoria, New South Wales, the ACT and New Zealand.
It lost around 39% of available in-store trading days across its store network.
Despite that, the business reported that total sales were only down 0.9% year on year (or down $0.6 million in dollar terms). Compared to the same period in FY20, two years ago, overall sales were actually up by 15.7%.
Like for like sales including online (a measure that shows the stores that were open) showed growth of 7.2% against FY21 and growth of 33.6% compared to FY20.
Total online sales grew 58.6% year on year, with a rise of 329.4% against FY20.
Reopening rebound
Shaver Shop said that its sales performance has rebounded strongly as the store network re-opened. This is giving management confidence leading into the Black Friday, Christmas and Boxing Day trading periods.
For example, the NSW corporate store sales between 11 October 2021 through to 7 November 2021 were up 17.4% year on year. Since Victoria stores reopened on 30 October 2021, total Victoria corporate store sales were up 28.8% year on year.
Management comments
Shaver Shop CEO and Managing Director Cameron Fox
said: “The start to the year was impacted by COVID-19 related store closures but our teams have retained their passion and enthusiasm throughout. Since re-opening, our business performance has been very pleasing which gives us additional confidence as we enter our most important trading period of the year.
“Our promotional plans are in place with our stores well stocked. Our teams are ready to welcome customers back to Shaver Shop and delight them at every touchpoint.”
Thoughts on the Shaver Shop share price
This business is showing impressive resilience with all of the impacts happening.
Looking at the profit projections on CommSec, Shaver Shop shares are currently priced at 8 times the 2022 estimated earnings and under 7 times the estimated earnings for the 2023 financial year. That seems very cheap. Perhaps the market is undervaluing the business? It also has a trailing fully franked dividend yield of 7.8%, which is a big yield.
It could an option to consider if it’s able to grow profit from here, considering how cheap it is.
