Two FTSE 350 stocks with matchless performance that I would buy today

John Wallace highlights two UK-listed stocks he believes are ‘best in class’ in their sectors.

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The British High Street appears to manifest a sluggish performance compared with the golden age of the past. With retail sales accounting for £381 billion to the UK economy, 19.2% of that was online. This rejigging of the industry through the threat of online sales, reduced footfall and unyielding taxes leaves only the most competitive of retailers to survive.

Britain being a nation of shopkeepers leaves investors to question, in this time of peril, whilst seeking sanctimony of safety from a declining high street, where do our best stores lie?

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A Sporting Success

JD Sports (LSE: JD) now trades at an all-time high, with a sharp rise of 83% in its share price over the past year alone at the time of writing. The sports, fashion and outdoor retailer has 2420 stores worldwide, with a market cap of £8.44bn, whilst year on year revenues grew by 49.23% from 3.16bn to 4.72bn. It may just turn out that the sports retailer did ‘just do it’ after all.

Surely JD is overpriced? Well, it is strongly positioned to increase its global market share of retailing. Assertive international expansions through mass acquisitions have helped build up momentum with strong support from key brands.

Remarkably, an average store generates £1k per sq ft. Higher operating cashflows have enabled management to drive store rollouts, where acquisitions of retail chains, like Footasylum, have encouraged a higher share price.

The ability for JD Sports to stay ahead of trends, adapting to the digitalisation of the retail industry and manoeuvre itself towards upcoming events such as Euro 2020 and The Olympics, has helped to validate a stronger brand, positioned to increase market share and consolidate the sports retailing market globally.

A New Record

The Dunelm Group (LSE: DNLM) share price has more than doubled since February 2019, reaching all-time highs to £14.04 this month. A new record, £585m in revenue of which 33% derived from online sales, has proven DNLM’s strategy of focusing on online sales to have paid off.

Over the past three years, Dunelm failed to grow earnings per share (EPS), which fell 0.2% annually. Given revenue growth of 7.8%, it may be the case that DNLM sacrificed current EPS to drive growth.

The robust performance by Dunelm is much more impressive with the decision not to participate in Black Friday sales last November, where investors celebrated as underlying sales increased by 11%, far exceeding expectations.

Not only has DNLM set a new record, a precedent has been established. As competitors, such as John Lewis of Hungerford, continue to neglect and disappoint investors with pitiful earnings, it seems Dunelm, the UK’s leading home furnishing retailer, could be a glamorous stock to frame in your portfolio.

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John Wallace has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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