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Highlights
- Super Retail reports positive sales growth in FY25.
- Loyalty programs at Supercheap Auto and Rebel impact profit margins.
- Rising costs expected due to distribution center transition and inflation.
Super Retail Group Ltd (ASX:SUL), owner of popular retail brands like Supercheap Auto, Rebel, BCF, and Macpac, has released its FY25 trading update, revealing solid performance across key segments. The update came during the company’s annual general meeting, highlighting both sales growth and the challenges ahead.
For the first 16 weeks of FY25, Super Retail reported a 2% growth in like-for-like (LFL) sales and a total sales increase of 4%. Supercheap Auto, one of the company's flagship brands, saw a 4% rise in total sales, supported by growth in the auto maintenance category. However, increased competition and slowing sales in New Zealand have required more promotional efforts. The new Supercheap Auto loyalty program is expected to boost customer spending but is anticipated to have a slight negative impact on gross profit margins.
Rebel, another key brand, reported a 2% increase in total sales, driven by its footwear and apparel categories. Like Supercheap Auto, Rebel’s loyalty program has performed well since its October 2023 launch. However, redemptions from the program have affected profit margins, lowering them by approximately 140 basis points.
BCF, which focuses on outdoor and adventure gear, saw a total sales growth of 6%, supported by the expansion of its fishing, caravan, and 4WD product ranges. Macpac, a brand specializing in outdoor equipment and clothing, reported the highest sales growth among the group, with a 10% increase in total sales. Macpac's growth was driven by strong demand for insulation, rainwear, and packs, though challenging conditions in New Zealand tempered the results.
Super Retail also highlighted rising operational costs due to the transition to a new distribution center in Victoria, with a one-off $8 million increase in expenses expected. Inflation appears to be easing, but cost pressures are likely to persist in FY25.
While the company is optimistic about its future, it acknowledged uncertainty in the consumer market due to ongoing cost-of-living challenges.
