Retail Sales fall in December

Our market bounced out of the gate but fizzled away as the day wore on after lower-than-expected retail sales were reported in December. The ASX200 ended the day slightly lower, falling by 0.07%, or 5.00 pts to close at 7,476.70. Despite the fall in retail sales, Consumer Staples rose the most of the five sectors that were in the green, rising by 2.33%. Tech gave back some ground after what has been a strong start to the year for the sector, falling by 1.34%. The Real Estate sector followed closely behind, dropping by 1.08%.

Lithium had a precipitous drop in price, particularly among the industry's heavyweights, such as Pilbara Minerals (-5.0%), Allkem (-7.5%), and Core Lithium (-5.7%).

The two stocks that dropped the most today were Megaport and Sayona Mining, with respective decreases of 24.74% and 11.86%.

Quick Singles

• Novonix Ltd (ASX: NVX) share price dropped 10.6% to $1.73 following the release of the company’s latest quarterly update. Novonix reported cash receipts of $2.1m in the quarter with a net cash loss of $8.8m

• Bubs Australia (ASX: BUB) share price fell 11.3% to $0.32 after the company released a disappointing quarterly update where it reported a 28% drop in Q2 revenue

• BWX Ltd (ASX: BWX) share price fell 10.4% to $0.22 on downgraded revenue and earnings forecasts. BWX lowered its FY23 revenue guidance from $205m - $230m to $170m to $190m

• Trading in Flight Centre (ASX:FLT) was paused today at $15.83 following the announcement of the company's $211 million acquisition of luxury travel brand Scott Dunn.

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Top Story

Retail Sales Take a Tumble in December

Contrary to forecasts, retail sales in Australia took a steep dive in December, plummeting 3.9% compared to an expected 0.2% decline. The drop follows a 1.7% increase in November, fueled by Black Friday sales. The last time retail sales saw a decrease was in December 2021, with a 3.7% dip.

Ben Dorber, head of retail statistics at the Australian Bureau of Statistics, stated that this was the first monthly decline in retail sales for 2022, after 11 consecutive monthly increases. Despite the setback, retail sales remain robust, with a 7.5% year-to-date growth.

Severe cost-of-living pressures are reportedly the primary restraint on consumer spending, causing many consumers to shift their Christmas shopping to November to take advantage of Black Friday discounts.

Department stores saw the largest decline, with a 14.3% decrease, followed by clothes, footwear, and personal accessory retailing at 13.1%. The household goods retailing sector saw a 7.8% decrease, with other retailing declining by 0.1% (negative 4.6%). The only industry to experience growth was food retailing, with a 0.3% increase. Retail sales in most states and territories declined by more than 3%.

The ASX reacted positively to the news, with a 0.4% intraday increase.

Movers and Shakers

✅Biggest Winners

PWR Holdings (ASX: PWH) shares rose by nearly 5% to $12.30 today on news that PWR Europe is moving to Rugby, acquiring UK-based Bespoke Motorsport Radiators, and appointing a new General Manager. PWR Europe moved from Silverstone to Rugby's 38,647 square metre buildings last week. It acquired UK-based Bespoke Motorsport Radiators on January 30, 2023. (BMR). BMR's revenue over the last four years has averaged £520,000. The existing funds will cover the £674,870 purchase price.

Cronos Australia (ASX: CAU) share price increased by 1% to $0.51. after the medical cannabis company made adjustments to its clinical operations this morning. This will result in the closure of clinics on the Gold Coast, Brisbane, and Sunshine Coast and the transition to a 100 per cent telemedicine service. These adjustments are anticipated to result in substantial savings in overhead expenses.

❌ Biggest Losers 

Megaport (ASX: MP1) share price fell 24.4% to $5.81. This followed the delivery of its' quarterly updater, which fell short of expectations. Megaport announced a 10% rise in quarterly sales to $37 million and $148 million in annualized recurring revenue. This and its growth in new services fell short of analyst expectations.

Pointsbet Holdings (ASX: PBH) share price was down 17.1% to $1.41 despite a 56% increase in revenue to $2,068.8 million and a 34% increase in net win to $103.4 million, Pointsbet posted a net cash outflow of $75.7 million for the quarter.

IGO (ASX:IGO) shares closed down 7.08 per cent at $14.57 despite posting record EBITDA in today's half-year financial report. The company's EBITDA increased by 269% year-over-year to $834 million. The company also reported a record net profit after taxes (NPAT) of $591 million, representing a 549 per cent rise over H1 FY22.

Small-Cap of the Day

Money Me posts record revenue

Moneyme Ltd, a digital consumer lending company listed on the Australian Securities Exchange (ASX) under the ticker symbol "MME," has seen a significant increase in its share price. The company's shares rose 64.3% to $0.46 following the release of its second-quarter financial results, which showed record revenue and statutory profits that exceeded analyst expectations.

This recent surge in the Moneyme share price is a much-needed boost for investors, as the stock has been struggling over the past 12 months, declining by 83%. The current economic climate has presented numerous challenges for the consumer lending industry, including a decline in new loan originations and an increase in defaults. Despite these difficulties, Moneyme is managing to weather the storm and is committed to generating profitable growth.

It remains unclear whether the recent decline in the economy has already been reflected in Moneyme's stock price. However, the company's impressive financial performance and commitment to growth suggest that it is well-positioned to overcome these challenges and deliver value to its shareholders.

In conclusion, the recent increase in the Moneyme Ltd share price is a positive sign for the company and its investors. While the consumer lending industry is facing significant challenges, Moneyme is proving to be resilient and is on track to deliver strong results.

Outlook

1st February

• US Consumer Confidence (est. 109)

2nd February

• US ADP Employment Report (est. 170k)

• US ISM Manufacturing (est. 48)

• US FOMC Rate Announcement (est. 4.63%)

• AU Building Approvals

3rd February

• US Jobless Claims (est. 200k)

4th February

• US Non-farm payrolls (est. 185k)

• US Unemployment rate (est. 3.6%)

That's it from the team at ASX-News today. We hope you enjoyed our EOD wrap-up. Good night and happy investing!