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The S&P/ASX 200 Index (ASX: XJO) had a roaring 2021 – it gained 13% – but many of its retail constituents performed better.

The index doesn’t include many retailers, but some of those that earned their way into its ranks proved that they belong there last year.

Let’s take a look at which retailers were the top performing ASX 200 shares in their class in 2021.

Here are the 5 top performing ASX 200 retail shares of 2021

Premier Investments Limited (ASX: PMV) – gained 28.9%

The Premier Investments share price outperformed all its peers last year, surging from where it ended 2020 – $23.51 – to finish 2021 at $30.32.

Those who frequent shopping centres have likely seen the company’s brands. It owns the likes of Smiggle, Jay Jays, Peter Alexander, and Dotti.

A trading update in January got the stock off to the right start last year and its continued strong performance kept it on track.

Super Retail Group Ltd (ASX: SUL) – gained 18.3%

After closing 2020 at $10.53, the Super Retail share price took off over 2021 to end the year at $12.46 – a gain of 18.32%.

Like Premier Investments, shoppers will probably be familiar with the company’s brands, which include BCF, Rebel, and Supercheap Auto.

The best day of 2021 for the Super Retail share price came on 7 October when it gained 7%, potentially spurred by a broker upgrade.

Wesfarmers Ltd (ASX: WES) – gained 17.6%

ASX 200 giant Wesfarmers has landed on this list, taking out the final medal for retail shares.  

The company’s stock grew from $50.40 at the end of 2020 to finish 2021 at $59.30.

Over 2021, Wesfarmers worked to takeover the owner of Priceline stores, Australian Pharmaceutical Industries Ltd (ASX: API).

The company operates retail stores including Kmart, Officeworks, and Bunnings.

Woolworths Group Ltd (ASX: WOW) – gained 14%

The Woolworths share price also outperformed the market in 2021 – just.

Its stock was swapping hands for $33.30 at the end of 2020. Come the final session of 2021, it closed at $38.01. That represents a 14.1% gain.  

The major news of Woolworths last year was, of course, the demerger of Endeavour Group Ltd (ASX: EDV).

Through the demerger, the company spun out its drinks businesses, including Dan Murphy’s and BWS, into a stand-alone ASX-listed company.

Harvey Norman Holdings Limited (ASX: HVN) – gained 5.3%

Finally, while the Harvey Norman share price didn’t manage to beat the market last year, it did land itself in fifth place on this list.

The stock started the year off well, surging to a multi-year high of $4.93. Then, in February, it hit a 10 year high of $5.68.

Harvey Norman didn’t hold onto those early gains. It ended the year trading at $4.94. Though, that’s still higher than where it finished 2020 – at $4.69.

That’s despite the company’s share price falling all 3 times the company released periodic earnings last year. First in February, again in August, and once more in November.

The post There were the 5 best performing ASX 200 retail shares of 2021 appeared first on The Motley Fool Australia.

More reading

• ASX 200 retail shares slump despite higher-than-expected sales
• Woolworths (ASX:WOW) supply woes continue with retailer receiving half of normal deliveries
• Following the Wesfarmers (ASX:WES) API takeover? Here are some key dates to watch out for
• Top ASX dividend shares to buy in 2022
• ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Super Retail Group Limited. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Strong retail sales data released today failed to lift sentiment towards ASX 200 retail shares this afternoon.

Retail trade jumped 7.3% month-on-month to $33.4 billion in November last year, according to the Australian Bureau of Statistics (ABS).

That’s around twice what economists surveyed by Bloomberg were expecting, reported The Australian, and is 5.8% above November 2020.

Big rebound in consumer discretionary spending

The increase marked the largest monthly improvement since May 2020 when retail trade surged 16.6%. That followed a 17.4 per cent plunge in the first round of COVID-19 lockdowns in April that year.

Consumer discretionary goods are leading the rebound in retail sales. Footwear and personal accessory retailing surged 38.2% in November, department stores added 26% and household goods improved 11.6%.

But ASX 200 retail shares aren’t celebrating today. The Premier Investments Limited (ASX: PMV) share price closed down 1.75%, Wesfarmers Ltd (ASX: WES) shares fell 1.35%, and the JB Hi-Fi Limited (ASX: JBH) share price dropped 0.55%.

In fact, the retail sector fell in sympathy with the S&P/ASX 200 Index (ASX: XJO), which ended the day down 0.77%.

Why are ASX 200 retail shares underperforming?

There could be a few reasons for this. The latest ABS figures were promising, but that was two months ago. Markets are forward-looking, so historical data isn’t quite as exciting for ASX investors.

In the meantime, retail sales are facing some headwinds. Findings by the Australian Retailers Association (ARA), released on Monday, show three-quarters of retailers currently have staff in isolation due to COVID-19.

The findings also show that 50 per cent of businesses ranked “staff shortages” as their main challenge. This was followed by “lack of customers” and “supply chain/delivery issues”.

Coles Group Ltd (ASX: COL) last week reported they were suffering supply issues. This was followed by similar claims by Woolworths Group Ltd (ASX: WOW) yesterday.

The New South Wales and Victorian state governments are also starting to reimpose some social restrictions.

There are worries the malaise will last for a while yet, and if there is one thing investors hate, it’s uncertainty.

Confidence takes a blow

Little wonder that consumer confidence has taken a blow. The latest ANZ-Roy Morgan Consumer Confidence index fell 2.4 points to 106.0 during the first week of January. The reading is 2.9 points below January 2021.

The spread of Omicron is cited as the key reason for the decline with 14% of Australians expecting “good times” for the Australian economy over the next 12 months – a drop of 5 percentage points from the previous survey.

In contrast, 24% of Aussies expect “bad times”, which is a 4 percentage point increase over the last survey.

The post ASX 200 retail shares slump despite higher-than-expected sales appeared first on The Motley Fool Australia.

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• 2 high-yielding ASX 200 dividend shares to boost income
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s been another tough day for the City Chic Collective Ltd (ASX: CCX) share price, continuing a shocking run for the fashion retailer.

The company’s shares closed down 8.4% at $4.47 apiece. That’s five consecutive days of falls for the retailer’s share price.

Let’s take a closer look at what is going on with City Chic.

What’s impacting City Chic?

The City Chic share price slumped today despite no news from the company. One explanation for this drop could be a fall in consumer confidence in the retail sector due to COVID-19 Omicron fears.

Consumer confidence was down 2.2% compared to 18-19 December, a survey from ANZ-Roy Morgan released today revealed. Analysts attributed this result to the “rapid rise of Omicron cases across Australia”.

For perspective, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) finished the trading day down 0.9%, while the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) closed down 2.13%.

The City Chic share price has dropped 18.55% since the start of January.

That said, my Foolish colleague James recently reported broker Bell Potter gave the company’s shares a $7.40 price target.

The last price-sensitive news from the company was on November 17. City Chic shares soared nearly 6% on the back of a well-received annual general meeting update. Sales revenue grew 32.9%, while comparable sales growth was 31.6%.

The company’s global customer base also grew 61% from the previous year to more than 1 million.

City Chic share price snapshot

The City Chic share price has returned around 19% in the past year. That’s 9% more than the benchmark S&P/ASX 200 Index (ASX: XJO).

In the past month, its shares have lost 21%, while they are down nearly 19% in the past week.

The company commands a market capitalisation of roughly $1 billion based on the current share price.

The post The City Chic (ASX:CCX) share price tumbled 8% today. What’s happening? appeared first on The Motley Fool Australia.

More reading

• Potential buys: 2 excellent ASX shares
• Bell Potter names the best ASX retail shares to buy in 2022

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vmoto Ltd (ASX: VMT) share price has rocketed to a 9-month high today. This comes after the company announced profit guidance for the 2021 financial year.

At market close, the electric-powered scooter manufacturer’s shares were up 9.52% to 46 cents apiece. That’s after hitting an intraday high of 49 cents this morning.

Vmoto continues to accelerate sales growth at a rapid pace

The Vmoto share price pushed higher after investors digested the company’s latest announcement.

According to its release, Vmoto advised it has sped up its international strategy, delivering record sales units to key markets.

In total, more than 30,000 units were sold in FY21, representing a significant 27.4% increase on the prior corresponding period.

As a result, the company expects to achieve FY21 net profit after tax (NPAT) between $7.5 million and $7.8 million. Notably, this will be the largest net profit ever recorded in Vmoto’s history. To put this into perspective, NPAT stood at $3.7 million for the 2020 financial year.

The company highlighted that it had completed a number of operational and commercial milestones in FY21. This included generating positive operational cash flows leading to a strong cash positive with no bank debt.

Furthermore, Vmoto’s presence also expanded as more international B2C (business to consumer) distributors were secured, bringing the total to 58 across 62 countries. Its B2B (business to business) operations also grew through the use of increased popularity in delivery and ride-sharing services.

Vmoto managing director, Charles Chen commented:

I am delighted to announce we will deliver a significant increase in NPAT for this financial year when compared to 2020.

We remain confident the underlying fundamentals of the business will continue to deliver strong growth throughout key international markets. We are also extremely excited to have launched the new Vmoto premium brand and products having worked alongside a number of top industrial design partners in Europe to bring a wider range of products to the international markets.

Quick take on Vmoto

Vmoto Limited is a leading global scooter manufacturer and distribution group specialising in electric powered two-wheel vehicles. Vmoto’s electric-powered two-wheel vehicle products have chic European design and German engineering.

Last year, Vmoto undertook an extensive strategic review of operations with the intention of simplifying the company’s structure. This allowed management to focus on international sales and marketing of electric two-wheel vehicle products.

Vmoto share price summary

It’s been a sound year for Vmoto shareholders, having gained around 15% in the last 12 months of trading. However, the company’s shares have started 2022 on a positive note and are up more than 8% to date.

In the last month, the Vmoto share price regained support and climbed by more than 17%, despite no new updates from the company.

Based on today’s price, Vmoto has a market capitalisation of around $130 million and a price-to-earnings (P/E) ratio of 22.14.

The post Here’s why the Vmoto (ASX:VMT) share price is powering ahead by 10% today appeared first on The Motley Fool Australia.

More reading

• When did AMP (ASX:AMP) last pay a dividend and when might the next one be?
• Why is the Core Lithium (ASX:CXO) share price hitting all-time highs today?
• Why did the Syrah (ASX:SYR) share price jump 12% to a multi-year high today?
• Medibank (ASX:MPL) share price shrugs off further questions over profit paybacks
• What made the NAB (ASX:NAB) share price so appealing in 2021?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Over the years, the AMP Ltd (ASX: AMP) dividend has been a favourite of income investors across Australia.

However, that cannot be said about the financial services company today.

What’s happened to the AMP dividend?

Prior to the Royal Commission, AMP regularly shared a large portion of its bountiful earnings with investors in the form of dividends.

However, since paying a dividend of 28 cents per share in both FY 2015 and FY 2016 and then 29 cents per share in FY 2017, AMP’s dividends have collapsed along with its earnings.

For example, in FY 2018 AMP cut its dividend to 14 cents per share, didn’t pay a dividend in FY 2019, and then paid a dividend of 10 cents in FY 2020. Though, it is important to highlight that the latter dividend was a special one relating to the AMP Life asset divestment. Had that sale not been made, AMP would most likely not have paid a dividend.

Unfortunately, things are likely to remain tough for income investors in FY 2021, with the AMP board deciding against paying an interim dividend during the first half and looking unlikely to pay a final dividend with its full year results.

Management explained: “The board continues to maintain a conservative approach to capital management to support the transformation of the business. In line with this approach, the board has resolved to not declare an interim 2021 dividend. The capital management strategy and payment of dividends will be reviewed following the completion of the demerger in 1H 22.”

When will AMP pay one again?

According to a recent note out of Citi, its analysts aren’t recommending AMP shareholders hold their breath for a dividend in the near term.

Its analysts aren’t expecting a dividend to be paid in FY 2022 or FY 2023. The broker feels FY 2024 is when dividends will resume and is forecasting a 6 cents per share partially franked dividend.

Citi currently has a high risk neutral rating and $1.25 price target on the company’s shares.

It commented: “While the [investor day] material provides welcome further transparency and on FY23 earnings the stock looks inexpensive, there remain a lot of moving parts. So, for now, we retain our Neutral, High Risk call and A$1.25 TP.”

The post When did AMP (ASX:AMP) last pay a dividend and when might the next one be? appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to sell today
• Why did the AMP (ASX:AMP) share price fall 35% in 2021?
• In the ‘dog basket’: 6 ASX shares that could rebound in 2022
• Leading brokers name 3 ASX shares to sell
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Core Lithium Ltd (ASX: CXO) share price is surging on Tuesday, hitting a new all-time high in the process.

The gains have come about despite no news having been released by the company. However, sentiment for lithium seems to be having a moment, with brokers bearish on stocks in the segment.

At the time of writing, the Core Lithium share price is 69.7 cents, 8.9% higher than its previous close.

That’s slightly lower than its intraday high, and new record high of 70 cents.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.7%.

Let’s take a look at what might be bolstering the lithium explorer’s stock today.

Has this sent the Core Lithium share price to new heights?

The Core Lithium share price is roaring higher today, just weeks after a top broker updated its forecasts for the lithium sector.

As my Foolish colleague Zach Bristow reported last week, JP Morgan is expecting big things from lithium in 2022.

The broker is among many believing lithium will see more demand than supply in coming years. It’s also predicting the commodity’s market will see a compound annual growth rate of 24% between now and 2030.

S&P Global Platts is also optimistic about lithium. It’s predicting a supply shortfall of around 5,000 megatons of lithium carbonate equivalent in 2022.

As per the law of supply and demand, the price of lithium should increase alongside any deficit.  

Meanwhile, Core Lithium’s other leg, its uranium assets, might also be helping to boost its share price.

On top of the company’s Finniss Lithium Project, it also owns the Napperby Advanced Uranium Project and the Fitton Uranium Project.

Macquarie analysts have recently upped their outlook for the uranium spot price.

Such sentiment could be helping to buoy sentiment in the company’s stock today.

The post Why is the Core Lithium (ASX:CXO) share price hitting all-time highs today? appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX uranium shares of 2021
• New year’s resolution: Why are ASX lithium shares having such a stellar day?
• Why has the Core Lithium (ASX:CXO) share price leapt 15% since Christmas?
• Why is the Core Lithium (ASX:CXO) share price having such a lousy month?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Syrah Resources Ltd (ASX: SYR) share price has been a very strong performer on Tuesday.

At one stage today, the graphite producer’s shares were up 12% to a multi-year high of $2.10.

The Syrah share price has since given back some of these gains but remains up 8% at $2.01.

Why is the Syrah share price surging higher?

Today’s rise in the Syrah share price comes despite there being no news out of the company today.

However, it is worth noting that the company’s shares have been on fire over the last few weeks thanks to the release of a very positive announcement before Christmas that revealed that Syrah has signed a deal with electric vehicle giant Tesla.

According to the release, the company has signed an offtake agreement with Tesla for the supply natural graphite Active Anode Material (AAM) from its vertically integrated AAM production facility in Vidalia, USA.

The release explains that Tesla will offtake the majority of the proposed initial expansion of AAM production capacity (8kt pa of 10kt pa) at Vidalia at a fixed price for an initial term of four years. This will commence from the achievement of a commercial production rate, subject to final qualification.

The offtake obligation is conditional on the parties agreeing the final specifications of AAM by no later than 31 December 2022 and achieving final qualification of AAM to Tesla’s satisfaction by no later than 31 May 2025. The agreement may also be terminated if production has not started by 31 May 2024.

Why is this a big deal?

Management commented on the deal, explaining why it has big consequences for the company’s future.

It said: “The importance and materiality to Syrah of the agreement with Tesla is that it provides a foundation to proceed with the initial expansion of Vidalia’s production capacity, as stated in the announcement of 23 December 2021.”

“The terms of the Agreement including volume, pricing and term will assist Syrah in finalising its investment decision in relation to Vidalia. Syrah plans to make a final investment decision for construction of this expanded facility in January 2022, subject to financing commitments,” it added.

Following today’s gain, the Syrah share price is now up almost 80% over the last 12 months.

The post Why did the Syrah (ASX:SYR) share price jump 12% to a multi-year high today? appeared first on The Motley Fool Australia.

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• Why BrainChip, PointsBet, PolyNovo, and Syrah shares are pushing higher
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• Why Anteotech, Bega Cheese, Humm, and Syrah shares are racing higher
• Why Magnis, Pilbara Minerals, Syrah, and Whispir shares are storming higher
• Syrah (ASX:SYR) share price higher after new Tesla update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Medibank Private Ltd (ASX: MPL) share price hit a 52-week high today. This comes despite calls for the government to provide greater oversight of how health funds return COVID-19 savings to members.

At the time of writing, Medibank shares are up 0.42% from yesterday’s close, currently swapping hands at $3.56.

Let’s take a look at what may be impacting the health insurer’s shares today.

What’s happening at Medibank?

In early trading today, the Medibank share price surged to $3.74, a 52-week high, before retreating to its current level.

Investors appear to be unphased by calls for more government oversight on health insurance payouts to members. The pandemic fuelled a rise in net profits in the private health insurance sector of $1.8 billion last year.

In late December, Medibank returned $135 million in COVID-19 net claims savings to customers by holding off its premium increase for five months.

However, The Australian reported Private Hospitals Association chief executive Michael Roff questioned the transparency of how funds returned COVID-­related savings. He commented:

There needs to be some formal government monitoring of health fund balance sheets to determine how much money they’re collecting that they thought they’d pay out – and how do we actually ensure that that gets back to members.

To date, there’s been no process and it’s been less than transparent.

The Medibank share price gained 11% throughout the course of 2021, despite the uncertainty caused by the pandemic.

As my Foolish colleague Aaron reported yesterday, the company recently released its calendar for the 2022 financial year.

Medibank is expected to reveal its half-year results for FY22 on 25 February.

Share price snap shot

The Medibank share price has gained almost 20% in the past year.

Shares in Medibank are up around 6% in the past week, while they are up more than 5% in the past month.

The company has a market capitalisation of about $9.8 billion based on the current share price.

The post Medibank (ASX:MPL) share price shrugs off further questions over profit paybacks appeared first on The Motley Fool Australia.

More reading

• Own Medibank (ASX:MPL) shares? Here are some key dates to watch in 2022
• How did the Medibank (ASX:MPL) share price perform in 2021?
• Here are the top 10 ASX shares today
• Why Afterpay, BrainChip, Medibank, and WiseTech shares are racing higher
• ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The National Australia Bank Ltd. (ASX: NAB) share price shot the lights out last year, cementing one of its best performances since 2013.

Shares in the big four banking constituent surged 27.6% to $28.84 by the end of 2021. For comparison, the S&P/ASX 200 Index (ASX: XJO) gained 13%. Based on this information, shareholders of the 40-year-old enjoyed a substantial outperformance of the benchmark even before dividends.

So, what transpired in 2021 to give NAB shares an extra boost above the rest?

Earnings rebound puts NAB share price back on the menu

NAB shares bounced back strongly early into last year as economies kicked back into action. The National Australia Bank wasn’t alone in witnessing this economic trend, other major banks also caught the wave of economic improvement.

The first quarter of FY21 provided the initial indication of better times for the NAB share price. In its release, NAB posted a $1.7 billion unaudited statutory net profit. Additionally, credit impairment charges fell 98% compared to the second half of FY20. This removed a large, lingering, and gloomy cloud over the major bank — helping improve sentiment towards NAB shares.

Yet, the rebound in earnings did not end with the first quarter. Instead, each of the succeeding quarters in 2021 resulted in NAB’s 12-month trailing earnings rising. By the time the 2021 full-year results came around in November, NAB was back to pre-pandemic revenue and profits.

In specific terms, the second-largest major bank reported cash earnings of $6,558 million in FY21. Impressively, this represented a 76.8% increase on the previous year.

Banking on a bigger future

Last year also involved a couple of notable acquisitions for ASX-listed NAB. In January, the NAB share price was in focus after the bank announced its agreement to acquire Australian neobank 86 400. The move is in line with the bank’s mission to develop a leading digital bank.

The 86 400 acquisition received approvals from the courts and regulatory bodies in May. From there, the scheme became effective from 12 May 2021, with implementation on 19 May. For reference, NAB paid $220 million for the digital banking land grab.

Backing this up was another acquisition announced in August last year. This time it was the Australian consumer business of Citigroup. The deal valued at $1.2 billion sent the NAB share price higher upon release to the share market.

The post What made the NAB (ASX:NAB) share price so appealing in 2021? appeared first on The Motley Fool Australia.

More reading

• These were the top 5 ASX 200 bank shares in 2021
• Here’s why this top ASX broker picks NAB shares out of the big four banks
• Here’s why CBA (ASX:CBA) shares have the lowest big four bank dividend right now
• Does the prospect of higher rates make ASX 200 bank shares more attractive?
• Could NAB (ASX:NAB) shares be a dividend gold mine this year?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The SDI Limited (ASX: SDI) share price is having a rocky day on the market despite the company announcing record sales in a trading update today.

Despite the sales boost, shares in the dental manufacturer dropped as low as 16% before rebounding in early afternoon trade

At the time of writing, the SDI share price is down 10.19% at 92.5 cents apiece.

Resumption in dental work a key driver of sales

Today’s trading update announced a 26% increase in unaudited global sales for the six months ending 31 December 2021 to $46.2 million.

That compares to $36.8 million in sales for the same period last year and represents a record first-half performance for the company.

SDI believes the resumption of normal trading conditions last year were a key driver of the sales increase, with the exception of the New South Wales and Victorian markets due to their extended COVID-19 lockdowns.

But the company reported it has been affected by higher logistics costs in the first six months of FY22 due to the disruption in global freight activities. SDI says this has impacted gross product margins by 7%.

Despite strong sales in its Australian direct exports and in Brazil, up 65% and 66% respectively, these are lower margin regions for the company.

Overall, total gross product margins for the first half of FY22 fell by 12% to 53%, compared to 65% for the prior corresponding period.

It seems investors reacted negatively to news of an expected fall in net profit. SDI reported its net profit (after tax) for the period will be between $2.5 to $3 million, compared to $4.6 million for the same time the year prior.

The company’s half-year results will be released on 17 February.

SDI is a Victorian-based manufacturer of specialised dental equipment sold in more than 100 countries.

SDI share price snapshot

Over the last 12 months, the SDI share price has increased by 26% although it has dropped almost 10% in the past month.

The company has a market capitalisation of $112 million and a price-to-earnings ratio (P/E) of 21.11.

The post Why the SDI (ASX:SDI) share price is falling 10% today appeared first on The Motley Fool Australia.

More reading

• Why ARB, Inghams, James Hardie, and SDI shares are sinking

Motley Fool contributor Alice de Bruin has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SDI Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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