Super Retail Group Ltd (ASX: SUL) shares fell more than 2% today, coinciding with the release of July retail sales data from the Australian Bureau of Statistics (ABS).
Super Retail Group is a retail conglomerate that traces its history back to the 1970s and is now one of the biggest in the country. It operates a number of recognisable retail brands including BCF Boating Camping Fishing, Macpac, Rebel Sport and Supercheap Auto
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ABS Retail Sales Data
Super Retail shares are falling today despite no announcements from the company, but one possible reason is the July retails sales data from the ABS.
The data released this morning shows that retail sales fell 0.1% in July in seasonally-adjusted terms, which follows a 0.4% rise in June.
Clothing, footwear and personal accessory retailing was hit the hardest, down 1%. This category would comprise much of Super Retail’s operations.
Department stores also saw a decline, while food retailing and household goods retailing both rose in July.
State-by-state, there were declines in Queensland, New South Wales, Victoria, South Australia, Tasmania, and the ACT, while WA and the NT both recorded stronger sales.
Time To Sell Super Retail Shares?
Not quite.
The ABS, apart from reporting a seasonally-adjusted figure, also reports a trend estimate which is designed to reflect the longer-term behaviour of the data and smooth out month-to-month volatility.
The trend estimate for retail sales in July actually rose 0.1%, following a 0.2% rise in June. Compared to July 2018, the trend estimate rose 2.4%. This suggests that over the longer term, retail turnover is still faring reasonably well.
This is also reflected by Super Retail’s FY19 results, which showed total group sales were up 5.4% in the year with like-for-like sales growth of 2.9%.
Summary
While it’s important to keep on eye on some of the broader macro trends, I don’t think investors should read too much into the Super Retail share price drop today.
Super Retail reported growth despite challenging conditions in FY19 and if you hold onto your shares, you’ll be rewarded with a hefty 5.34% dividend yield.
For other proven dividend shares, have a look at the free report below.
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Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.
