The Super Retail Group Ltd (ASX: SUL) share price rose more than 6% in response to the company’s FY24 result.
Super Retail owns a number of leading retailers including Supercheap Auto, Rebel, BCF and Macpac.
FY24 result
Here are the highlights for the 12 months to 29 June 2024:
- Total sales increased 2% to $3.9 billion
- Online sales growth of 9% to $485 million
- Gross profit margin increased 10 basis points (0.10%) to 46.3%
- Segment EBIT down 9% to $400 million
- Normalised net profit after tax (NPAT) down 11% to $242 million
- Statutory NPAT declined 9% to $240 million
- Fully franked final ordinary dividend of $0.37 per share
- Fully franked special dividend of $0.50 per share
The company reported that it expanded its network by 28 new stores. It also pointed to a growing loyalty base, successfully launching the Rebel Active loyalty program and increased total active members by 12% to 11.5 million.
Looking at the individual sales performances in FY24, Supercheap Auto sales grew 3% to $1.5 billion, Rebel sales fell 1% to $1.29 billion, BCF total sales grew 5% to $879 million and Macpac total sales rose 3% to $222 million.
Trading update
In the first seven weeks of FY25, total sales for Supercheap Auto increased 6%, for Rebel were up 1%, for BCF were up 5% and for Macpac were up 15%. In total, group sales were up 5% in the first seven weeks of FY25, with 3% like for like sales growth.
Supercheap Auto executed a successful ‘best performing oils’ promotion. Footwear and apparel have driven higher sales in Rebel. BCF has seen continued growth in fishing, caravan and 4WD. Macpac has delivered a “strong finish” to the peak winter sales period.
The Super Retail Managing Director and Chief Executive Officer Anthony Heraghty said:
The group has made a strong start to the year with positive sales momentum across all of our four core brands. The outlook for the consumer in the year ahead remains uncertain given ongoing cost-of living pressure on household budgets.
We will continue to manage our costs effectively while investing in the business for future growth. The Group’s customer value proposition, the strength of our 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.
Outlook for the Super Retail share price
The company noted it’s expecting duplicated operating expenses related to the transition from the existing distribution centre facilities to the new Victorian distribution centre and will result in a one-off increase to group and unallocated costs of $8 million.
Super Retail also said that inflation nationally seems to be easing, but it expects upward pressure on its cost base in FY25 due to wages, of approximately 3%, as well as an increase in penalty rates.
The company said targeted benefits from its ‘workforce planning capability’ along with other improvements to terms are expected to “more than offset the impact of penalty rate increases.”
With the Super Retail share price up 35% in the past year, I certainly wouldn’t call it a great buy. I’d prefer to invest when there’s uncertainty about the retail sector.