Super Retail Group feeling the pinch

In a trading update posted this week, Super Retail Group, who owns rebel, Supercheap Auto, BCF, and Macpac released its results for weeks 27 to 43 of the 2023 financial year (Q3). The results reflect sales growth and while small, is still notable.

Supercheap Auto has grown 5 percent YoY, rebel 9 percent, BCF 3 percent, Macpac 18 percent, and overall group sales growth for weeks 27 to 43 of the 2023 financial year (Q3) has risen 6 percent.

Group gross margin percent in the second half year to date is 10bps below what was delivered in the first half.

According to the trading update, Supercheap Auto has seen an ongoing shift in consumer demand to less discretionary items with auto maintenance and lubricants the strongest performing categories. rebel has achieved strong sales growth in football and basketball. BCF sales reflect a growing contribution from strategic brands. The level of promotional intensity in the camping and outdoor category remains high, with aggressive mark down activity from competitors. Macpac delivered a record Easter trading result driven by higher sales in both Australia and New Zealand.

“Following strong trading in the key Easter holiday period, I am pleased to report that the Group has continued to deliver positive like-for-like sales growth in FY23 YTD,” commented Super Retail Group Managing Director and Chief Executive Officer Anthony Heraghty.

During the first half, the Group reported an additional $10 million in operating expenses as it invested in new loyalty programs and data solutions. It also reported 30 percent profit growth and $1.96 billion in sales.

With increasingly climbing operating costs and declining demand, Heraghty is aware that tough times are ahead.

“The way we think about it, underlying demand for retail will be flat to negative. We are planning for the worst and hoping for the best,” he told the Macquarie Australia Conference.

“We are always of the view that the COVID bubble would end. We took a lot of steps in terms of store investment and in terms of our investment in digital to bolster the business when the bubble starts to decline,” he said.

As of Thursday afternoon, Super Retail Group shares have dropped 7.1 percent since the trading update, sitting at $12.49 compared to $13.45 at yesterday’s close.

The trading update concluded with a statement reading, “offshore freight costs have returned to pre-pandemic levels however inflationary pressures on wages, rent and energy expenses will impact Group CODB in the second half. The Group is continuing to invest in customer loyalty, digital capability, new store openings, store refurbishments and alternative store formats.”

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