If you’re looking for retail exposure, here are two ASX growth shares that are worth looking out for in February’s ASX reporting season.
Temple & Webster
Shares in retailer Temple & Webster Ltd (ASX: TPW) have fallen over 15% in just a few days, despite no market sensitive announcements from the company.
TPW is due to report its earnings on 2 February, so it might possible that some investors are taking some profits off the table prior to its announcement.
Still, in its last FY21 trading update, the company announced that FY21 had started strongly, with a significant increase in year-on-year (YoY) revenue growth of 161% (to Aug 27). This was coming off a relatively small base considering COVID-19 wasn’t around the same time the year before, but it’s impressive nonetheless.
As of August last year, its cash balance was $81 million with no debt, with an active customer base of over 500,000.
The question is how much of this growth has already been factored into the current share price?
With a market capitalisation of over $1.3 billion, TPW is not in what I would consider bargain territory. However, there’s a fairly compelling investment case given the potential growth opportunity as it expands into new markets.
For more reading on Temple & Webster shares, click here to read: Temple & Webster share price nears all-time high – too late to buy?
Redbubble
This is an interesting one that’s clearly been a COVID beneficiary, given the rapid shift in consumer behaviour.
One thing to note about Redbubble Ltd (ASX: RBL) is its high level of diversification across different product ranges.
Mask sales exploded last year and represented 27% of total sales in July. When the demand eventually pulled back, this was offset by a pickup in its homeware and artworks categories which continued to perform extremely well.
COVID-19 continues to take its toll overseas, especially in the US and in the UK.
As unfortunate as this is, the “stay at home” thematic and continued stimulus has proven to be the perfect storm for many retailers and in my view, it seems possible that Redbubble will continue to be a beneficiary from these conditions.
Even in a post-COVID world, the overall thematic of online marketplaces seems powerful.
The company hasn’t provided any earnings guidance, so it’s possible there may be some surprises (either good or bad) when the company is due to report on 16 February. Stay tuned to Rask Media…
