Super Retail Group Shares Dip Following Trading Update

October 24, 2024 02:09 AM EDT | By Team Kalkine Media
 Super Retail Group Shares Dip Following Trading Update
Image source: Shutterstock

Highlights

  • Super Retail Group reported a 4% rise in sales for the first 16 weeks of FY 2025, with like-for-like sales growth of 2%.
  • Investors appear cautious due to management's warning about the uncertain outlook for consumer spending amid cost of living pressures.
  • Despite today’s dip, Super Retail Group's shares remain up over 30% year-on-year.

Shares of Super Retail Group Ltd (ASX:SUL) have come under pressure, dropping by 3% to AU$16.26 on Thursday morning. This decline follows a trading update released ahead of the company’s annual general meeting, which has prompted some concerns among investors despite positive sales growth.

Sales Growth in First 16 Weeks of FY 2025

The trading update revealed that Super Retail Group’s sales increased by 4% during the first 16 weeks of FY 2025 compared to the same period in the previous year. This growth was driven by a combination of new store openings and like-for-like sales growth of 2%. The company's Supercheap Auto division performed in line with the overall group, also posting a 4% rise in total sales and a 2% increase in like-for-like sales.

While the company’s performance indicates steady growth, investor concerns seem to stem from management's cautious outlook on future consumer spending.

Cautious Outlook Amid Cost of Living Pressures

Super Retail Group’s management has warned of uncertainty in the consumer market due to ongoing cost of living pressures on household budgets. The company’s CEO highlighted that while the group’s core brands and loyalty programs provide resilience, the overall outlook for consumer spending remains unclear.

In the update, the CEO stated: “The outlook for the consumer remains uncertain, given ongoing cost of living pressure on household budgets. The Group's customer value proposition, the strength of the four core brands and the size of our customer loyalty club membership base means Super Retail Group remains well-positioned to perform in retail market conditions where customers are carefully managing their spending and prioritising value-for-money purchases.”

Management also pointed out that the group’s first-half financial results will heavily depend on trading performance during the crucial Christmas period, a key sales window for retailers.

Shares Still Up Year-On-Year

Despite the short-term dip in share price, Super Retail Group's stock has performed strongly over the past year, with shares up by more than 30% compared to this time last year. However, today's decline reflects investor concerns about how consumer spending trends might evolve in the face of economic uncertainty.


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