Super Retail defies slump in online buying to boost sales to a record $3.8b

Super Retail defies slump in online buying to boost sales to a record $3.8b

Adventure goods retailer Macpac led Super Retail Group's like-for-like sales growth in FY23. Photo via Facebook.  

Super Retail Group (ASX: SUL) has posted record sales of $3.8 billion in FY23 with a slump in online buying offset by customers returning to in-store shopping to deliver the company a 7 per cent lift to the bottom line.

Super Retail Group – operator of the Super Cheap Auto, Rebel, BCF and Macpac brands – has delivered a net profit after tax of $263 million for the year to the end of June.

The result was boosted by an expanded store network, with 24 new stores opened across the company’s portfolio, although the group still managed sales growth of 8 per cent on a like-for-like basis versus 7 per cent for group sales.

However, Super Retail Group notes that online sales of $445 million were down from $601 million in FY22 – a year in which that figure surged by 44 per cent.

This has cut the contribution of online sales to group revenue from 17 per cent to 12 per cent over the past year as customers reverted to pre-pandemic shopping behaviour. Click-and-collect sales accounted for 48 per cent of group online sales.

CEO Anthony Heraghty says new store openings, refurbishments and the rollout of new formats had been a key driver of revenue growth in FY23.

“The group’s financial performance was also underpinned by the addition of more than a million active club members to our customer loyalty base in the past 12 months,” he says.

“The group now has more than 10 million active club members across its loyalty programs, representing 73 per cent of group sales.”

Heraghty says cost-saving initiatives in sourcing, supply chain and logistics, as well as workforce management, have helped the group offset higher wage, electricity and rent costs. This has driven a lift in profit margins.

“Pleasingly, despite the increase in interest rates and cost of living expenses, which have affected consumer spending, the group has delivered a resilient second-half trading performance.

“The group achieved 6 per cent like-for-like sales growth in the second half, with all four core brands reporting positive same store sales growth.”

However, a breakdown of performance over the year shows that BCF was the weakest sales performer for the group in terms of like-for-like growth over the year after delivering a flat sales result.

Adventure goods retailer Macpac’s sales were up 24 per cent followed by Super Cheap Auto at 10 per cent and Rebel at 9 per cent.

“Sales growth has continued to moderate as the group cycles strong sales in the prior year and rising interest rates and cost of living pressures dampen consumer spending,” Heraghty says.

“The group has a solid track record of performance through the economic cycle. Our customer value proposition and low average ticket price means we are well positioned for a more value-conscious consumer environment.”

Super Retail Group plans to open 24 new stores in FY24 and to continue rolling out the BCF Superstore and Rebel rCX store formats, while converting more Supercheap Auto stores to the company’s ‘next generation’ format.

“We also see a significant opportunity to leverage our customer loyalty base, including through the relaunch of the Rebel loyalty program prior to Christmas,” Heraghty says.

“Super Retail Group’s unique portfolio of retail brands with market-leading positions in growing lifestyle and leisure categories, our large active club membership base and strong balance sheet mean the group is well placed to deliver long-term value for our shareholders”.

Super Retail Group is paying a final dividend of 44c per share and a special dividend 25c per share. This brings the total payout for FY23 to $1.03 per share.

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