The Super Retail Group Ltd (ASX: SUL) share price is up more than 4% after providing a good trading update.
Super Retail is responsible for a number of brands including Supercheap Auto, Rebel, BCF and Macpac.
FY24 trading update
Despite all of the problems amid the cost of living difficulties, Super Retail reported total sales growth of 3%, with like-for-like sales growth of 1% in the first half of FY24, being the 26 weeks to 30 December 2023.
Supercheap Auto total sales were up 4%, Rebel total sales were down 1%, BCF sales were up 8% and Macpac total sales rose 4%.
The company revealed first half revenue is expected to be $2 billion and first half profit before tax (PBT) is predicted to be between $200 million to $203 million.
Looking at the divisional PBT, Supercheap Auto could make between $106 million to $107 million, Rebel could make between $64 million to $65 million, BCF could make between $40 million to $41 million and Macpac could make $8 million. Group and unallocated PBT is negative $18 million.
Interestingly, the company said its gross profit margin in the FY24 first half is expected to be “higher” than the FY23 first half. But, the cost of doing business (CODB) is a percentage of sales has increased because of wage inflation. Rebel’s CODB has been impacted by its “lease portfolio and its higher team member-to-store ratio.”
What helped the strong sales?
Super Retail explained its sales “traded well” over the cyber sales and Christmas holiday trading period.
However, the retailer did note a more “constrained retail trading environment at the end of the second quarter.”
Super Retail also revealed “well-executed promotions during peak end-of-year trade have delivered revenue growth that has translated into strong first half earnings.”
The company also said it has no drawn bank debt and a positive cash balance.
Final thoughts on the Super Retail share price
Surprisingly, the Super Retail share price is at an all-time high and comfortably above where it was in 2021 – which is when many retailers’ share prices peaked.
The retailer is showing strong performance despite high interest rates. Will retail sales continue doing well? It’s really hard to say, but it has been impressive up to now.
I wouldn’t call it a great value buy in the shorter-term. But, it could justify today’s valuation when interest rates start falling.
