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Highlights
- Super Retail Group’s sales momentum slows as promotional activity increases.
- Supercheap Auto’s performance driven by auto maintenance category, including lubricants.
- Legal challenges arise for Super Retail Group regarding governance breaches.
Super Retail Group (ASX:SUL) has experienced a slowdown in sales momentum across its brands, including Supercheap Auto, Rebel, BCF, and Macpac. CEO Anthony Heraghty addressed the issue, noting that while sales grew, the pace had slowed compared to earlier in the financial year. The company's overall sales growth for the first 16 weeks of the year hit 4%, down from 5% in the first seven weeks. Same-store sales grew by 2%, while total sales rose 4%. However, this fell short of expectations, as consensus had projected 4.4% growth in the first half.
The slowdown was particularly notable at Supercheap Auto, the group’s largest business. While sales in the auto maintenance category, including lubricants, saw strong performance due to a successful "best performing oils" campaign, the overall sales momentum has decelerated, especially in New Zealand. The competitive environment has intensified, leading to increased promotional activity.
At Rebel, sales in the footwear and apparel segments grew, but promotional discounts were introduced to clear inventory for new stock ahead of the holiday season. Meanwhile, BCF saw growth in the fishing, caravan, and 4WD segments due to an expanded product range. However, Macpac's growth momentum has also slowed, despite solid sales in insulation and rainwear products.
In addition to sales challenges, Super Retail Group is facing legal issues, with outgoing chairwoman Sally Pitkin acknowledging allegations of corporate governance breaches. The company is currently involved in a legal dispute with two former executives who have made serious claims. Super Retail has denied these allegations and is preparing to defend itself in court.
Looking ahead, Super Retail Group plans to open 25 new stores over the next year, with nine already operational. Mr Heraghty also mentioned that while inflation appears to be easing, cost pressures on the company are expected to continue.
