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2 super growth stocks you might regret not buying

Retail play Joules Group (LSE: JOUL) was trading fractionally higher in Tuesday trade, its share price up 1% at pixel time following the release of reassuring financials.

Whilst many of Britain’s listed retail players are suffering amid a sharp inflationary spike and rising consumer uncertainty, Joules Group is thriving at the minute. The AIM-listed share saw group revenues leap 18.2% during the six months to November, to £96.2m.

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Sales boomed on the back of “the brand’s expansion, growing customer base… and the strong performance of both new and core collections,” the company said. Its active customer base now stands at one million customers.

Joules Group saw retail revenues jump 16.2% in the period, to £65.9m, driven by “good growth across both stores and e-commerce.” Meanwhile sales at its wholesale division rose 23% year-on-year to £30.1m.

The strong first-half showing prompted chief executive Colin Porter to comment: “The Joules brand has performed well in the first half of fiscal 2018, delivering further expansion across markets, channels and product categories. The Group’s performance reflects the growing appeal of the Joules brand amongst both new and existing customers across our target markets.”

Another British beauty

Now although Porter added that “trading conditions will remain challenging,” City analysts do not see this as a barrier to terrific earnings growth in the near term and beyond. Current forecasts point towards earnings expansion of 19% and 23% in the years to May 2018 and 2019 respectively.

And current forecasts make Joules Group exceptional value for money. While a forward P/E ratio of 24.1 times is far from cheap, a corresponding PEG readout of 1.3 shows that the retailer is exceptionally priced relative to its profit prospects.

The company opened 10 new stores during June-November as part of its ongoing expansion strategy, and with demand from foreign customers also continuing to boom (international sales jumped 36.2% last year), Joules Group is rapidly expanding across Europe and the US.

I am convinced it could deliver the type of breakneck growth seen by fellow British brands Supergroup and Ted Baker.

Train and gain

JD Sports Fashion (LSE: JD) is another London-listed retailer whose international expansion programme could deliver brilliant earnings growth in the years ahead.

In the more immediate term, City analysts are expecting its earnings to rise 19% in the year to January 2018, and by an extra 11% in fiscal 2019. These projections create a cheap forward P/E ratio of 14.1 times as well as a corresponding PEG reading of just 0.7.

The trainers-and-tracksuits specialist launched a joint venture in South Korea back in September, giving it a firm base in Asia’s third-largest retail market and continuing its aggressive foray into overseas territories. Recent bubbly M&A action complements the huge organic investment JD Sports is making across the globe. It opened 40 new stores in the first half of this year alone, more than half of which were opened in mainland Europe.

I am convinced these measures should deliver brilliant profits growth long into the future.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Supergroup and Ted Baker plc. 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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