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Super Retail Group (ASX:SUL) saw its shares soar to record levels on Thursday, following the release of its solid FY24 financial results, which included an unexpected special dividend of 50 cents per share.
FY24 Earnings Overview
- Gross Sales: Increased by 2% to AUD 3.9 billion.
- Gross Margin: Improved by 10 basis points, reaching 46.3%.
- Statutory NPAT: Declined by 9% to AUD 240 million.
- Normalised NPAT: Fell by 11% to AUD 242 million.
- Dividends: Announced a fully franked final ordinary dividend of 37 cents per share, plus a special dividend of 50 cents per share.
- Net Cash Position: Ended the year with AUD 218 million in cash and no debt.
- FY25 Trading Update: In the first seven weeks, group like-for-like sales increased by 3%.
To provide context, the net profit figures aligned with expectations set by Macquarie in May. However, the total FY24 dividend (including the special dividend) of 119 cents per share significantly exceeded the anticipated 68.7 cents.
Earnings Call Highlights
During the earnings call, CEO Anthony Heraghty and CFO David Burns addressed several key topics:
- FY24 Performance: "The group delivered record sales of AUD 3.9 billion, achieving 2% sales growth. Despite a competitive environment, we increased our gross margin by 10 basis points to 46.3%."
- Inflationary Pressures: "The cost of doing business as a percentage of sales rose by 120 basis points due to inflation in rent, electricity, and wages. We managed to partially mitigate these through cost control initiatives. While inflation is gradually easing, we anticipate continued upward pressure on our cost base in fiscal 2025."
- Promotional Activities: "We achieved a 10-basis-point improvement in gross margin to 46.3%, despite absorbing the impact of the new loyalty program at Rebel and returning to a normal promotional environment."
- Consumer Spending Environment: "Flat like-for-like sales reflected the impact of higher interest rates and increased cost of living, which dampened consumer sentiment and spending."
- Online vs. In-Store Sales: "Our online sales grew by 9% to AUD 485 million, driven by a reignition of growth. However, 93% of transactions still occur in-store, underscoring the value of our national store network."
Analyst Q&A Highlights
- Gross Margin Outlook: "Promotions have returned to normal and are stable. We do not foresee any significant changes in gross margin driven by external factors."
- M&A Strategy: "Our strategy remains focused on our core four brands. However, we are open to considering acquisitions that align with this strategy or enhance one of our existing brands."
- Rebel Sports Performance: "It's improving, though not yet fully recovered. We are seeing early positive signs in certain segments."
- Rebel Sports and Footwear Segment: "We are more confident in the footwear and apparel segments. The recent changes in footwear offerings represent the most significant shift in a decade."
- Supercheap Auto Performance: "The tools category has performed well. We are focused on enhancing our offerings to make them more compelling and differentiated. No material changes in tone, depth, or frequency have been observed."
These highlights from Super Retail Group’s FY24 earnings call demonstrate the company’s resilience and strategic focus, positioning it strongly for continued success in FY25.
