Easing Inflation Boosts Australian Consumer Stocks
Australian inflation has cooled down to 3.8% in June, with monthly CPI slipping by 0.1% and trimmed mean inflation steady at 3.6%. This shift may ease some pressure on the Reserve Bank of Australia to lift rates further, which can change how investors think about consumer-focused stocks.
If borrowing costs stabilise or move lower, companies linked to discretionary spending can look different on a risk and reward basis. Three Australian Consumer Discretionary stocks from our screener appear positively exposed to this latest inflation news: Coast Entertainment Holdings (ASX:CEH), Collins Foods (ASX:CKF), and Crown Resorts (ASX:CWN).
Coast Entertainment Holdings operates theme parks, including Dreamworld and WhiteWater World on the Gold Coast, offering leisure and entertainment experiences. The group generates A$110.8 million in revenue from its Theme Parks & Attractions segment, all sourced in Australia. With a market cap of A$205.9 million, investors may want to consider this stock as a potential beneficiary of easing inflation.
Collins Foods operates KFC restaurants across Australia and Europe, as well as Taco Bell outlets in Australia. The company generates about A$1.24b in revenue from KFC Restaurants Australia and A$351.3 million from KFC Restaurants Europe. With a market cap of A$950.6 million, Collins Foods may be an attractive option for investors looking for a consumer-focused stock that can benefit from lower interest rates.
Crown Resorts is a large Australian entertainment and casino group with integrated resorts in Melbourne and Perth. The company's market cap stands at A$8.9b. With forecasts pointing to earnings growth of about 51% a year and revenue growth ahead of the broader market, Crown Resorts may be an interesting option for investors watching consumer-focused stocks.