Super Retail (ASX:SUL) began life as SuperCheap Auto and listed in 2004. The well known chain of car parts and supplies is still the largest component of the group, making up 38% of revenue. The name was changed to reflect the growing diversity of the business as a retail group. It is now focused on four main brands including BCF, Rebel and Macpac.
Over the last 20 years the business has grown from a market capitalisation of $210 million and sales of $383 million to market capitalisation and sales of $3.8 billion each today.
Focusing on the last five years they have sustained a sales CAGR of 8.5%. Sales jumped 22% in 2021 as they benefited from the Covid boost that saw many retailers experience bumper sales as governments handed out money and consumers had limited ability to spend on travel or experiences.
They have not only held onto these gains, but experienced further growth in 2023 of 7%. A number of other retailers, including Harvey Norman Holdings (ASX:HVN) and Temple & Webster (ASX:TPW) experienced sales declines in 2023. Growth is forecast to continue in 2024, whereas for others such as Nick Scali (ASX:NCK), JB Hi-Fi (ASX:JBH) and Harvey Norman, sales are forecast to decline.
In mid January they issued a trading update for the first half of the year which was very well received by the market. It showed a positive result of overall sales growth of 3% and like-for-like sales growth of 1%. The Christmas and Black Friday period saw robust trading despite cost of living pressures.
Source: Super Retail Group, Trading Update, 15/1/24
What was more impressive was the profit before tax figure expected to be between $200 and $203 million. This was well above market expectations. Gross margins are expected to have improved since H1 FY23 but the cost of doing business (CODB) has increased as had been previously foreshadowed.
Rebel sales were a bit soft in the most recent half, but they had strong like-for-like sales growth in FY23 of 9%. In October they launched a new customer loyalty program. Rebel are investing in their stores, with a focus on upgrading them to the rCX (rebel customer experience) format. These are large format stores with a wide range of…
