Super Retail Group’s Stock Arrowed Up On Trading Update

  • Apr 30, 2019 AEST
  • Team Kalkine
Super Retail Group’s Stock Arrowed Up On Trading Update

Super Retail Group Limited (ASX: SUL) today provided a trading performance update under the leadership of new CEO Anthony Heraghty.

In a presentation to the Macquarie Bank Australia Conference, Mr Heraghty told investors that in the early phase of his tenure the initial focus areas included supply chain integration, seamless omni-retail experience and simplification of the operating model to remove redundancy.

The Group reported 4.3% like-for-like sales growth for the first 17 weeks to 27 April 2019 including 4.2% growth in Supercheap Auto, 4.0% in Rebel Sports, 5.3% in BCF and 2.0% in Macpac. These results demonstrated that BCF maintained its top-line growth trajectory despite ongoing pressure on margins while the Auto and Sports businesses continued to perform in line with expectations.

All these three core brands have been enjoying market-leading customer loyalty performance with Macpac being an emerging & credible brand in a high growth segment.

The company further aimed at capitalising on retail brands and improving customer analytics under the umbrella of Super Retail Group. In the first 100 days of his appointment as CEO, Mr Heraghty focused on Enterprise Omni capability, Endless aisle, Omni delivery orchestration, Increased utilisation, Promotion and pricing and Real-time marketing among other things.

Key Highlights of the trading update include:

Auto retailing:

  • Like for like sales of 4.2% in the first 17 weeks of H2; 2.7% YTD to 27 April 2019

Outdoor retailing:

BCF like for like sales of 5.3% in the first 17 weeks of H2; 3.3% YTD to 27 April 2019. Competitive pricing pressure unchanged, the continuation of margin pressure in H2

  • Macpac like for like sales of 2.0% in the first 17 weeks of H2; 7.8% YTD to 27 April 2019

Sports retailing:

  • Like for like sales of 4.0% in the first 17 weeks of H2; 3.5% YTD to 27 April 2019

Group:

  • Super Retail Group like for like sales 3.3% YTD to 27 April 2019
  • Group unallocated costs expected to be circa $21m
  • Capital Expenditure circa $85m

SRG’s unallocated costs is expected to be approximately $21 million and capital expenditure of ~$85 million. The Proposed Enterprise Agreement (EA) for ~10,000 retail and clerical team members were approved in November 2018 with 93% support in the vote. Store wage inflation for the proposed EA over the 4 years is FY20 5.8% and FY21 to FY22 circa 2.9% due to the alignment of penalty rates in the first year.

The company told that existing agreement continues to operate pending FWC approval while formal discussions between FWC, SRG and bargaining representatives are underway.

SUL stock price has surged up by 3.341% to last trade at $8.660 on 30 April 2019. The stock closed at a Price to Earnings multiple of 12.950x with a market capitalisation of $1.65 billion.

Over the past 12 months, the stock has witnessed a positive price change of 16.23% including an upside momentum of 14.17% recorded in the past three months.

Also Read: Did Super Retail Stock Form An Inverse Head And Shoulders’ Pattern?


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