Super Retail Group Surpasses Expectations with Record AU$2 Billion First-Half Sales

Highlights:

• Super Retail Group anticipates an impressive first-half performance with record sales reaching $2 billion, showcasing its resilience amid economic challenges.
• Following the positive trading update, SUL's shares jumped by 6%, reaching $16.71, reaffirming the company's robust position in the market and a 46% increase in share prices over the past 12 months.
• Despite inflationary pressures, the company has strategically navigated rising costs, maintaining a higher gross margin in H1 FY24 compared to the same period in the previous year.

Anticipated First-Half Success

Super Retail Group (ASX:SUL), the force behind Supercheap Auto, Rebel, BCF, and Macpac, is poised for a remarkable first half, expecting record-breaking sales of $2 billion. Despite economic challenges, the company maintains resilience, with first-half profit before tax projected at $200–203 million. Share prices soared by 6% to $16.71, showcasing the retailer's robust position in the market.

Resilience Amidst Retail Storms

While 2023 witnessed a retail downturn, SUL defied the trend, avoiding the worst fallout with a 46% increase in share prices over the past 12 months. The company's ability to navigate cost pressures and secure sales growth is evident, particularly with BCF recording an 8% increase in first-half sales.

Brand Performance and Initiatives

Among its major brands, BCF excelled, with Supercheap Auto and Macpac experiencing a 4% surge in sales. Rebel faced a minor setback with a -1% decline. The launch of Rebel Sport's loyalty program in October proved successful, with over 40% of members earning points through purchases.

Addressing Cost Challenges

Despite inflationary pressures affecting wages, rent, and electricity costs, CEO Anthony Heraghty assures investors that the gross margin in H1 FY24 is expected to surpass H1 FY23. Initiatives to counteract rising costs include the construction of an $80 million automated distribution center in VIC, set to open in 2026.

Outlook and Investor Interest

Investors eagerly await full financial results, seeking insights into how each brand performed during the

first half. The company's strategy to manage rising costs while retaining budget-conscious consumers is crucial. The impact of Rebel Sport's customer program, costing approximately $8 million in deferred revenue, remains a focal point.

Optimistic Future

Despite challenges, Super Retail Group's diverse portfolio, positive sales growth, and effective cost management position it for a promising financial year. Improving consumer sentiment, reflected in the ANZ-Roy Morgan Consumer Confidence Index, adds optimism, with potential future rate cuts expected to spur discretionary spending.

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