The Super Retail Group Ltd (ASX: SUL) share price fell 12% after reporting its FY25 half-year result.
Super Retail is the owner of a few different retailers including Supercheap Auto, Rebel, BCF and Macpac.
Super Retail’s HY25 result
Here are some of the highlights from the half-year result:
- Sales grew 4% to $2.1 billion
- Online sales growth of 10% to $286 million
- Group gross profit margin decreased 70 basis points (0.70%) to 45.6%
- Segment EBITDA declined 2% to $393 million
- Segment profit before tax of $185.8 million
- Normalised net profit of $130.8 million down 9.9%
- Statutory net profit of $129.8 million down 9.5%
- Interim dividend of $0.32 per share
Super Retail said that its brands maintained pricing and promotional discipline amid “pockets of elevated promotional activity”.
Looking at the individual sales performances of the businesses, Supercheap Auto grew sales by 1.7%, Rebel grew sales by 4.4%, BCF sales rose 6.9% and Macpac sales increased 1.7%.
The company said ongoing inflationary pressures on the cost of doing business have impacted profit before tax growth and margins in the period.
Second half trading update
In the second half of FY25, weeks 27 to 33, Supercheap Auto sales were flat, Rebel sales rose 7%, BCF sales grew 11% and Macpac sales increased 5%.
The company said this growth reflects ongoing benefits from the execution of its “peak trade period, pockets of improvement in New Zealand.”
Conditions in the automotive category are “consistent” as the first half, with ongoing competitor discounting, and software overall demand levels, particularly in New Zealand.
Rebel and BCF continue to deliver “strong sales momentum”.
The company plans to open 28 new stores in FY25, with 11 new Supercheap Autos, 11 new Rebels, four new BCFs and eight new Macpacs.
Management comments
The Super Retail Managing Director and CEO Anthony Heraghty said:
We are pleased with the start to the second half of FY25, with like-for-like growth of 5 per cent and improved gross margins, highlighting the benefit of operating a portfolio of brands.
Despite an ongoing subdued consumer environment, we remain relatively well positioned given our customer value proposition, the strength of our brands and our loyalty programs, as well as the resilience of the lifestyle and leisure categories in which we operate.
The Group is targeting capex in FY25 of $165 million to fund its store development program, a new distribution centre, enhancements to its customer loyalty programs and cyber, omni and digital capability.
As previously flagged, the Group expects to incur duplicated operating expenses associated with the transition from existing distribution centre facilities to the Group’s new Victorian distribution centre. These duplicated expenses are now expected to result in an increase to Group and unallocated costs in FY25 of $10 million. Total Group and unallocated costs in FY25 (including this $10 million) are expected to be $42 million, compared to $36 million in FY24.
While inflation appears to be gradually easing, the Group expects continued upward pressure on its cost base in FY25.
Final thoughts on the Super Retail share price
The business is now a lot cheaper, so it could be an interesting ASX share to look at following the heavy decline.
I think retail shares can be interesting cyclical opportunities, so it could be a contender to rebound in the future. However, I’m not sure if one interest rate cut will be enough for earnings to recover.
There are other ASX dividend shares to look at that could be safer, more consistent bets.
