The end of the financial year (EOFY) is fast approaching, which means EOFY sales and retail therapy for many of us. According to Choice.com.au, the top 5 most popular sales products during the EOFY sales period are electric heaters, washing machines, televisions, coffee machines, and ovens.
As we let that sink in, let's cast our eyes over to the S&P/ASX 200 (INDEXASX: XJO) index. Based on Choice.com.au's findings, a couple of standout ASX-listed companies to potentially have a cracking sales period are Harvey Norman Holdings Limited (ASX: HVN) and JB Hi-Fi Limited (ASX: JBH).
The retail landscape
Retail sales figures over the past year have been sliding, most recently a 0.1% decrease reported for end of April despite analysts hoping for a 0.2% increase. It's a tough market and we Aussies are sitting on our wallets.
Despite this, both Harvey Norman and JB Hi-Fi's share prices have achieved a one-year return of 15.88% and 16.83%, respectively. With a good deal and hopes of a pending modest tax return, householders might be motivated to hand over the credit card now and pay purchases off in a month's time.
So, let's take a closer look at our two potential beneficiaries of the EOFY sales period.
Harvey Norman
All the messaging out of Harvey Norman at its half-yearly report released in February was quite buoyant. Net profit before tax was up 7.5%, a 6.4% increase in earnings per share (current dividend yield at 7.43%) and booming offshore sales driving strong growth.
Despite sector headwinds and flagging sector retail results at home, Harvey Norman can maintain some momentum based on the upward trajectory of its overseas activities. For the record, I note the Harvey Norman website stocks 130 products in the electric heater range, ready for those EOFY bargain hunters!
JB Hi-Fi
JB Hi-Fi has also been telling a good story at its recent third-quarter announcement, with sales up across the group, which includes JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys (which it purchased back in 2016).
If you're investing with dividends as your primary focus, JB Hi-Fi sits at a healthy 5.15% dividend yield. Cautious long-term investors like myself might take a closer look at the historical data. I like to look at the five-year figures—I'm looking for nice, consistent upward movement on the chart. Back in 2014, I could have bought a single JB Hi-Fi share for $17.88 and sold it today for $26.95.
I note that the JB HiFi website offers 130 products in the television range with plenty of deals to be made, especially if you're after one of those giant, loungeroom-dominating TVs to get you through Wimbledon and the upcoming Ashes series!
Foolish takeaway
Both Harvey Norman and JB HIFI stand to make some gains from those Choice.com.au findings. The good news for investors in both stocks is that they both offer a diverse range of products in each one of the top 5 most popular sales categories.
It's now up to consumers to brave the winter chills and do some shopping!
In keeping with the retail theme, here are two ASX stocks set to profit from the digital payments revolution.
