These promising growth stocks could help you retire early

Buying these two stocks today could boost your long-term financial outlook.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The outlook for the UK economy remains relatively uncertain. Inflation has crept higher to 2.9%, and this could put pressure on consumer spending levels. It is now higher than wage growth, which has historically meant that consumer spending falls. As such, buying retail-focused shares may seem like a foolhardy move. However, with strategies that are working well and prospects which are relatively impressive, now could be the right time to buy these two clothing retailers.

Improving performance

Reporting on Tuesday was online and specialist-fit fashion retailer N Brown (LSE: BWNG). The company’s share price gained over 5% after it announced an improving performance from its business, as well as a store closure programme.

N Brown’s top line increased by 5.6% in the most recent quarter, with online revenue gaining 16%. The company has gradually been moving towards a more online-focused business model in order to keep costs down and adapt to an increase in online shopping. It now generates 71% of its revenue online, which is up from a figure of 67% last year.

The company also announced a store closure programme, with five of its unprofitable stores now set to be closed. Despite this, the overall performance of the business was positive, with an impressive period experienced for the Ladieswear segment in particular.

In the last five years, N Brown has recorded five consecutive years of falling earnings. While in the current year this trend is due to continue, next year it is expected to return to profit. This could lift investor sentiment and help to push the company’s share price higher. Since it trades on a price-to-earnings (P/E) ratio of 13.3, it seems to offer good value for money and could therefore be a sound buy ahead of an uncertain period for the UK retail sector.

High growth prospects

Also offering an upbeat outlook is online fashion retailer Boohoo (LSE: BOO). The company’s business performance continues to be strong, with an acquisition programme helping to keep sales and profit moving upwards at a double-digit rate. This looks set to continue, with the company forecast to post a rise in its bottom line of 32% in the current year, followed by further growth of 24% next year.

Boohoo has a relatively high P/E ratio of around 115. While this may put off a number of investors from buying the stock, its growth potential over the long run appears to be relatively impressive. It has the scope to engage in further M&A activity, while its international exposure means it should benefit from a weaker pound. With the UK political outlook highly uncertain, the business could see a significant gain from foreign exchange translation over the medium term.

Certainly, there are much cheaper shares within the retail sector. However, with an international focus, acquisition potential and an organic growth rate which is among the highest in the sector at the present time, now could be the perfect time to buy Boohoo for the long run.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended boohoo.com. 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.

More on Investing Articles

Investing Articles

How much would I need to invest in income shares to earn £300 a month?

What kind of lump sum would be required to earn £300 a month by taking advantage of some of the…

Read more »

Investing For Beginners

Up 31% in a month, could this FTSE 250 stock be getting bought out?

Jon Smith takes a look at speculation that's pushing the share price of a FTSE 250 share higher and considers…

Read more »

Investing Articles

Here’s how I’d follow Warren Buffett to start building passive income in 2025

Ben McPoland highlights one FTSE 250 firm with a strong competitive edge that he thinks can continue rewarding investors with…

Read more »

Investing Articles

Burberry shares: undervalued FTSE gems that are ready to rocket?

Burberry shares soared at the beginning of the week as the takeover rumour mill went into overdrive. Is Paul Summers…

Read more »

US Stock

Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

2 high-yield FTSE 250 shares I’d buy today — and 1 that I’d avoid

UK markets have felt some volatility after last week’s Budget and the FTSE 250 was no stranger to it. Our…

Read more »

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »