Lending Association

Super Retail anticipates subdued December half-year

Retail giant Super Retail Group (ASX:SUL) is anticipating a somewhat subdued December half-year performance, revealing a modest ‘record’ sales achievement for the period on Monday. The company projects a record revenue of approximately $2.02 billion (unaudited), a marginal improvement from the $1.96 billion in the December 2022 half-year, attributed to higher prices.

Despite an overall 4% rise in headline sales across its brands—Super Cheap, Rebel, Macpac, and BCF—like-for-like sales showed a slower 1% increase for the half. The company forecasts a pre-tax profit ranging between $200 million and $203 million, a noticeable decline from the $218 million reported in the December 2022 period.

Super Retail’s CEO, Anthony Heraghty, stated that the company performed well during the cyber sales and Christmas holiday trading period. He highlighted positive like-for-like sales growth in the first half but acknowledged cost-of-living pressures on consumers, leading to a more constrained retail trading environment by the end of the second quarter.

The company attributed the impact of inflation on wages, rent, and electricity to an increase in the cost of doing business (CODB) as a percentage of sales. Although gross margin (%) in H1 FY24 is expected to be higher than H1 FY23, the higher CODB has particularly affected Rebel due to its lease portfolio composition and higher team member-to-store ratio.

Super Retail reported successful results following the launch of Rebel’s new customer loyalty program in October 2023, with over 40% of active club members earning points through purchases. However, the first-half normalised profit before tax includes a provision for deferred revenue of approximately $5 million in H1 FY24 and an estimated $8 million for the full year FY24, aligning with previous disclosure.

Addressing financial stability, the company assured it had no drawn bank debt and maintained a positive cash balance at the end of the first half, consistent with the end of the 2022-23 period and the December 2022 interim period. These figures are preliminary, subject to audit review, and will be officially released on February 22.