It seems the surprises keep coming for local retailers.
Beacon Lighting Group Ltd [ASX:BLX] is the latest business to defy the downturn. Showcasing their strong sales performance amidst a global pandemic.
The news helped lift the BLX share price by 20% to $1.20 in trading today. Bringing it back to its pre-‘rona valuation.
A stark contrast to the March lows when the stock dipped to around 43 cents per share.
Keeping the lights on
From 30 December to 14 June, Beacon recorded a bumper period. Even outperforming their first half of the 2020 financial year.
Total sales were up 15.5% for the six-month period. Helping lift their net growth for the financial year to 7.1%. A result that Beacon is chalking up to a surge in DIY interest, as they note:
‘The Beacon Lighting Group has experienced significant growth in sales in H2 FY2020 as customers are spending more time working, educating and completing projects at home.’
However, Beacon realises this may be something of an outlier. Making sure to mention that this record result may not be indicative of sustainable demand:
‘Given the recent changes to customer shopping patterns and future changes in Government policies, it is uncertain as to whether the higher levels of sales will continue in the future.’
Either way, it is a fantastic result for the company at this moment.
And, more importantly, it has highlighted the importance of their online sales channels. Because in the last six months, online sales have grown 77.7%!
Granted, Beacon didn’t provide an exact figure for their online sales. So, this growth may be being inflated from a low base.
But still, it clearly shows that online will be a key channel for the company moving forward. Something that I’m sure plenty of other retailers have discovered in recent months.
Looking to the future
As for what comes next for this iconic retailer, there was little to talk about.
Beacon made no mention of any future plans or updates. Their wary warning as quoted above was about the only forward-looking assessment they shared.
You certainly can’t fault them for that. After all, we’re still in the midst of a lot of uncertainty. Not getting ahead of themselves may be a smart decision indeed.
It will be interesting to see if they decide to pursue a bolder online presence though. A strategy that has clearly shown it has the potential to reinvigorate this much-loved brand.
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For Money Morning