Shaver Shop Group Limited (ASX: SSG), established in 1986 and based in Chadstone, Australia, is a speciality retailer of personal grooming products for men and women in Australian and New Zealand region. It operates via stores while it also sells through online platforms.
On May 7th, 2019, the company released its Market Eye Investor Conference Presentation which contained the company overview, growth drivers and the outlook. Shaver Shop offers quality brands at competitive prices and operates around 121 stores across Australia and New Zealand. Besides, the company has had a strong growth record over the years, whereby the underlying sales growth has reflected a consistent uptrend from $63.2 million in FY2015 to $149.5 million in FY2018. The gross margins also remained stable fluctuating in the range of 41%-42% in the last five years.
Moreover, the underlying EBITDA results have also been consistent while the dividend payout improved over the years from 1.6 cps in FY2017 to 2.0 cps in FY2019.
There are some key growth drivers that have accelerated Shaver Shop’s business performance including operating in a mass market that is continuously evolving, particularly in the male segment. According to the company, it is yet to optimize engagement with the key, growing millennial consumer that is highly influenced by social media to become health conscious, constantly look good and opt for DIY beauty regime. Besides, the Global suppliers like Philips, Proctor & Gamble, Remington, Panasonic etc are investing heavily in new product innovation.
Several e-commerce enhancements has led to improved online metrics for the company that is focussed on investing in their omni retail capabilities. Thus, online sales now represent 11-12% of total network sales, with the target to reach 15 -20% in the next two to three years. Besides, Shaver Shop is also working on new store layout and design that is driving incremental same store sales growth of 10%+ and strong initial ROI.
As per the retail player, women account for over 50% of the total customers, which implies that broadening and innovating women beauty range would lead to improved brand recognition, drive significant, but short term, sales and earnings contributions.
Going forward, Shaver Shop Group aims to have a chain of a total of circa 140 stores in Australia and New Zealand.
Further, the company also released its Trading Update reflecting improved same store sales growth. Accordingly, for the last fourth months to April 2019, the underlying same store sales growth has been +8.7% up from +0.8% in the same period last year, driven by strong overall performance in core hair removal categories and hair styling. While for the 10 months ended April 30th, 2019, the underlying same store sales growth was +2.6%, up from +0.7% in the prior corresponding period.
Considering the underlying performance in the second half of FY19 to date, the Board of Shaver Shop Group has narrowed its normalised EBITDA guidance for the full financial year, to be in the range between $12.5 million- $14.0 million (previously $12.0 million- $14.5 million).
The specialty retailer, Shaver Groups’s market cap stands at around AUD 52.72 million with ~ 125.53 million outstanding shares. On May 7th, 2019, the SSG stock price settled the day’s trading at AUD 0.415, up 3.75% with ~ 135.4k shares traded.
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