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Forget Brexit! A growth stock I’d buy for my ISA to get rich and retire early

Times remain extremely tough for the UK retail sector. Department store Beales is the latest shopping institution to go into administration this week after almost a century-and-a-half of trading. And it’s not just the sellers of mid-to-high-priced goods that are suffering. Just ask Card Factory and Shoe Zone, for instance, retailers operating at the ‘budget’ end of their respective markets that are also struggling as broader consumer confidence sinks.

That’s not to say that all of the low-cost retailers are in danger, however. The continued surge of German discounters Aldi and Lidl are perfect evidence of this. So it can be said that sellers of non-discretionary items at lower price points are the exception to this rule. And in this theme I consider B&M European Value Retail (LSE: BME) to be a top buy right now.

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Sales still rising

I’m not saying that investor appetite for the FTSE 250 retailer has been that strong of late. Indeed, B&M’s share price has plummeted in the wake of worse-than-expected trading numbers earlier this month. Like-for-like sales in the UK edged 0.3% higher in the three months to December, it said back then, falling short of broker expectations of a 2.5% rise.

The Liverpool-based business put the result down to “a challenging broader retail market and our decision not to engage in any early discounting activity.” Trading at the business had been quite robust up until that third fiscal quarter — like-for-like sales at its British stores had grown 3.7% in the prior six-month period.

Those numbers didn’t have the market punching the air, sure. But B&M is still to be commended for growing sales at all given the dire state of the retail sector. Latest Office for National Statistics data showed sales in the UK fell for their fifth consecutive month in November.

Expansion plans

City analysts are expecting rampant medium-term profits growth at B&M. They predict a 17% earnings rise for the fiscal year ending March 2020. And despite the threat of Brexit uncertainty lasting through 2020 at least, the number crunchers anticipate a 13% bottom-line leap in the following period too.

B&M’s store expansion is key to their bullish forecasts. This programme helped total UK revenues jump 8.8% between September and December, the business opening 15 new B&M-monikered stores in the period. And the ribbon is set to be cut on another half a dozen shops in the current quarter alone.

Underlying sales at B&M might be under the cosh right now. But that expansion scheme, allied with its push into France and Germany (markets in which budget retailers have also thrived in recent times) should pave the way for excellent profits growth once broader trading conditions normalise. I reckon the recent share price pullback makes B&M a brilliant long-term buy for share investors, the business now trading on a rock-bottom price-to-earnings growth (PEG) reading of 0.9. This is a retailer that could help you get rich and retire in comfort.

A top stock with enormous growth potential

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of B&M European Value and Card Factory. 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.