How did Super Retail (ASX:SUL) fare in the first half of FY2021?

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How did Super Retail (ASX:SUL) fare in the first half of FY2021?

 How did Super Retail (ASX:SUL) fare in the first half of FY2021?

Summary

  • Robust customer demand helped Super Retail Group deliver record 1H results with impressive top-line growth and higher gross margin.
  • The Group outperformed in digital, reporting online sales growth of 87%.
  • The retailer highlighted that its omni-retail capability was instrumental during the first half.

Driven by strong customer demand, Australian retailer Super Retail Group Limited (ASX:SUL) reported an impressive first half FY2021 performance. The Group announced robust sales growth, improved gross margin and efficient cost management.  

Let us delve deeper and discuss the results in detail-

Robust top-line growth in 1H 2021

The owner of Supercheap Auto, Rebel, Macpac and BCF, reported record first-half results driven by robust top-line growth. The Group’s three largest brands contributed to the overall revenue growth.

Quick highlights from the first half –

  • Record first half result was driven by robust top-line growth, higher gross margin, as well as disciplined cost management.
  • The Group highlighted that its omni-retail capability has been instrumental during the first half.
  • Super Retail Group outperformed in digital and delivered 87% growth in online sales.
  • Substantial operating leverage indicating profitability of online sales and scalability of its omni-retail business model.
  • The Group witnessed strong cashflow generation and conservative balance sheet without any bank debt.
  • Super Retail is well-placed to reinvest in its four core brands and increase the Group’s market share.

On the first-half performance, CEO and Group Managing Director Anthony Heraghty pleasingly stated-

Financial Performance Highlights

During the first half the Group outperformed in digital and its online sale increased by 87%. Here are some key highlights-

  • Total group sales stood at A$1.78 billion, up by 23%.
  • Group like-for-like sales increased by 24%.
  • The Group highlighted that Click & Collect represented 45% of Group online sales.
  • The cash position of A$416.8 million reflects the equity raising of July 2020 and solid trading throughout the period.
  • The Group has declared interim dividend (fully franked) of 33.0 cents per share.

Segment results (Source: SUL Half Year Presentation, 17 February 2021)

Operational Performance Highlights

During the first half, the Group fulfilled more than 2 million online orders and now has a further 700,000 active online club members. The highlights from the operational front are-

  • The Group has a total 7.1 million active club members up by 10.9% as compared to pcp.
  • Active club members represent almost 61.6% of group sales.
  • Click & Collect sales increased by 73.7% to A$107.8 million on pcp.
  • During the period, home delivery sales rose by 100.3% to A$129.6 million on pcp.
  • The Group has made over 1 million home delivery shipments.
  • SUL highlighted that Phase 1 of OMS implementation delivering cost savings is in line with the Group’s anticipations.

Source: SUL Half Year Presentation, 17 February 2021

Anthony Heraghty commented:

SUL’s key progress during the period

  • Super Retail Group generated value via digital engagement with its club members and is establishing a seamless transactional experience.
  • The Group has aligned marketing, merchandising, as well as pricing strategies to its customers.
  • SUL strengthened its customer understanding with more sophisticated insights and analytics.
  • The Company is engaged in developing a structured customer relationship program to increase visitation and transaction growth.

Source: SUL Half Year Presentation, 17 February 2021

Stock Performance: SUL shares were trading at A$11.780, up 1.727% (at AEDT 3:41 PM). The Company has a market capitalisation of A$2.61 billion.

GOOD READ: Why should Super Retail (ASX:SUL) be on investors' radar?

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