Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Super Retail Group (SUL) says it delivered a small sales growth over the first half of the 2020 financial year despite the recent bushfires
  • Its four brands, including Supercheap Auto, BCF, Rebel and Macpac, achieved a total sales growth of 2.9 per cent and a like-for-like growth of 1.7 per cent
  • BCF took the hardest hit as over 50 stores were directly impacted with a reduced customer demand and temporary closures
  • The Group now expects its first half segment earnings before interest and taxes to be between $113 and $115 million
  • Super Retail Group has dropped slightly by 2.02 per cent and shares are trading for $9.56 each

Super Retail Group (SUL) has reported that despite recent drought and bushfires, it delivered a slight sales growth over the first half of financial year 2020.

The company was founded in the 1970s and has since grown to encompass four key brands. These include: Supercheap Auto, Rebel, BCF and Macpac.

In the 26 weeks to December 28 2019, the four brands achieved a total sales growth of 2.9 per cent and a like for like (LFL) sales growth of 1.7 per cent.

While this is a slight growth despite the devastation that has swept Australia, the group LFL sales growth for weeks 17 to 26 was flat compared to a 3.2 per cent growth in the first 16 weeks.

“After a strong start to our peak trade season with higher year-on-year trading across the Black Friday and Cyber Monday online events, the bushfires and sustained drought conditions have impacted December trading,” Managing Director and CEO Anthony Heraghty said.

Mr Heraghty spoke on behalf of the company and extended its deepest sympathies to everyone affected by the fires.

“With businesses in many of the fire-ravaged regions, we want to help our customers, team members and their communities and, as previously announced, Super Retail Group has contributed $250,000 to the Red Cross Disaster Relief and Recovery program,” he added.

All brands reported negative impacts however BCF and Macpac were most affected due to their higher exposure to the outdoor category.

Over 50 BCF stores have been directly impacted and experienced a downturn in customer demand for camping and other outdoor products. The bushfires also forced a temporary closure of BCF stores which disrupted trading.

Macpac LFL sales declined by 9.5 per cent in Australia, with New South Wales and Victoria being the most impacted.

Supercheap Auto’s sales were also impacted, particularly in the Eastern states, while Rebel saw a slowing of sales momentum after week 16 across New South Wales.

Super Retail Group expects its first half segment earnings before interest and taxes (EBIT) to be between $113 million and $115 million. Final half year results will be released on February 20 2020.

While the bushfires were a key contributor in the decline of sales, Group earnings have been heavily impacted by higher store labour costs and the reported underperformance of Macpac.

Macpac’s gross margin was negatively impacted by a delay in price increases for the peak winter promotion period.

The Group expects gross margin in the second half to be higher than the prior corresponding period and, assuming normal weather conditions, it expects Macpac’s second half EBIT to be higher than the $5.5 million priorly delivered.

“While first half earnings were challenged by exceptional circumstances, there are a number of positives in the expected result that bode well for the second half,” Anthony said.

Despite these impacts, positive milestones for the companies included strong sales and gross margin performance in Rebel in the second quarter, a stabilised performance from Supercheap Auto and BCF, a 22 per cent online sales growth supply chain costs per unit decreased year-on-year.

Super Retail Group has gone down slightly by 2.02 per cent and shares are trading for $9.56 each at 2:58 pm AEDT.

SUL by the numbers
More From The Market Herald
Aurizon (ASX:AZJ) - Managing Director and CEO, Andrew Harding

" Aurizon (ASX:AZJ) slashes half-yearly dividend ahead of One Rail buyout, net profit down 4pc

Rail freight operator Aurizon (ASX:AZJ) has slashed its first-half dividend by nearly a third amid slightly…

" Aurizon Holdings (ASX:AZJ) reveals $1.3B refinancing deal

Aurizon Holdings (ASX:AZJ) has agreed to a restructured debt deal, giving the company access to some…

" Aurizon (ASX:AZJ) profits from failed ACCC appeal

Rail freight operator Aurizon (ASX:AZJ) can progress with the sale of its Acacia Ridge Terminal after…

" Aurizon (ASX:AZJ) to buy One Rail for $2.35b

Rail transport company Aurizon (ASX:AZJ) agrees to purchase One Rail Australia for $2.35 billion.