Super Retail Group Ltd (ASX: SUL) shares are up 6% after giving the market a trading update for the first half of FY19.
Super Retail Group is a retail conglomerate that traces its history back to the 1970s, it’s now one of the biggest in the country. It operates a number of recognisable retail brands including BCF Boating Camping Fishing, Macpac, Rebel, and Supercheap Auto. It’s headquartered in Brisbane and has over 12,000 employees in Australia, New Zealand and China.
Super Retail’s Trading Update
Although the audited results are due for release in just a couple of days, the company has decided to give investors a sneaky peek about most of them operating numbers it’s going to report.
Super Retail’s total group sales grew by 6% to $1.4 billion compared to the same period last year. The company’s EBITDA increased by 11.3% to $166.2 million and EBIT increased by 9.6% to $124.5 million (click here to learn what EBITDA and EBIT is).
The retailer said that all segments provided a positive contribution, with the Auto, Outdoor and Sports segments’ EBIT expected to grow by 2.5%, 39.6% and 5.2% respectively. Operating cash flow is expected to be $235.4 million.
Super Retail CEO Peter Birtles said: “Growth in our markets [is] being driven by customers shopping through digital channels and we were pleased to maintain strong growth in our online sales as we leveraged the re-platforming of all of our websites.
“Online sales, as a proportion of overall sales, increased in all businesses and for Rebel now represents 11% of overall sales.”
Super Retail Second Half Update
The retailer said it has had a strong start to the second half, with its three largest businesses delivering positive sales growth.
Like for like sales has been around 4% at Supercheap Auto for the first six weeks of the year. BCF has delivered 8% comparable sales growth. Macpac sales are 2% below the prior corresponding period, whilst Rebel like for like growth has been 8%.
However, the company also announced today that it has to make backpayments of overtime and some allowances to retail managers after the discovery of a breach of the General Retail Industry Award. The additional cost will be $32 million for six financial years, and a further $11 million of interest and payroll tax.
As a result, Mr Birtles said he would step down as MD and CEO.
Is Super Retail A Buy?
The market certainly seemed to think so, with the share price up around 6% at the time of writing. Australian retailers are beating the pessimism at the moment, it seems. JB Hi-Fi Limited (ASX: JBH) also went up after its recently-reported result.
It probably would have been better to own Super Retail shares before this week, as the quick gains are probably priced in now. But, the underpayment and CEO leaving certainly takes the gloss off some good growth figures.
Personally, I wasn’t a fan of holding retailers when times were good and I’m equally sure I don’t want to buy them now as conditions are slowing. But Super Retail shares could beat the market this year if sales & profit grow more than analysts are expecting.
Instead, I’d rather get my hands on one of the proven shares in the free report below.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).