Super Retail Group (ASX: SUL) appears to be tackling weaker consumer sentiment head on with group sales in the first 16 weeks of this financial year tracking even higher than this time in 2022 when it was buoyed by a resurgence of post-pandemic trading.
The owner of the Supercheap Auto, Rebel, BCF and Macpac brands has reported a 4 per cent increase in group sales which was aided by new store openings. Notably, the group’s like-for-like sales were up 2 per cent.
Super Retail’s CEO Anthony Heraghty says the sales increase comes off the back of 20 per cent like-for-like sales growth in the previous corresponding period – a time when the retail sector was getting back to normal after the pandemic.
Supercheap stores performed strongest on a like-for-like basis with 4 per cent growth, while BCF delivered the strongest performance in total sales with an 11 per cent increase driven by new stores and higher demand for goods in boating, fishing and water sports.
Adventure goods store Macpac was the only division to report a drop in sales comprising a 7 per cent fall in total sales and an 8 per cent drop in a like-for-like comparison.
However, Heraghty says Macpac has come off a strong growth phases after experiencing 76 per cent like-for-like sales growth in the previous corresponding period.
“Sales in travel related categories (backpacks and luggage) are growing strongly, however unseasonably warm weather has affected sales of insulation and rainwear products,” he says.
“Supercheap Auto’s performance has been driven by ongoing strength in the auto maintenance category, including higher lubricant sales following a successful best performing oils campaign.
“Rebel rCX and new regional stores continue to perform well and its flagship store in Emporium, Melbourne is on schedule to open prior to Christmas. In addition, the new Rebel active customer loyalty program will launch by the end of October.”
Super Retail also points to gross margins holding up across the group despite the weaker Australian dollar putting pressure on the pricing of products.
“As previously announced to the market, as a result of continued inflationary pressures on wages, rents and electricity costs, the group expects its cost of doing business as a percentage of sales to increase in FY24,” Heraghty says.
Online sales represent about 11 per cent of sales this financial year to date, which is down from 12 per cent for the FY23 full year.
Super Retail has opened six new stores this financial year, putting the company on track for 24 store openings in FY24.
The group has also increased total active club membership to more than 10.5 million from just over 10 million at the end of June.
Super Retail Group posted a net profit of $263 million in FY23, up from $241 million a year earlier. The result was struck on a 7 per cent increase in group sales to $3.8 billion.
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