Why the Super Retail share price is marching on today
Shares in the retail chain have risen more than 100% over the past year boosted by growing sales at its rebel and BCF chains.
Shares in Super Retail Group (ASX: SUL) are on the way to record their best day in three months. The stock has already jumped nearly 5% to $12.20 in early trade, and is approaching its 52-week high.
Why the stock price is up
The owner of retail brands including Supercheap Auto, rebel and BCF on Tuesday posted a trading update that underlined the steady gains it has built over the past year.
Super Retail said like-for-like sales surged 28% in the first 44 weeks of the financial year. That was helped by strong Easter sales and continuing momentum from the first half, which has resulted in double-digit sales growth across most of its retail stores.
Sales were up 17% at Macpac, 20% at rebel, 21% at Supercheap Auto and an astounding 59% at its Boating Camping Fishing (BCF) chain. All those cancelled international vacations did have an upside!
Rising sales, strong margins
Meanwhile, the strong top line growth is also aiding the bottom line. Super Retail says improving customer demand has allowed it to cut back on promotions and discounts, which has in turn fed through to higher margins.
As a result, the group has been able to maintain the high gross margin that it delivered in the first half of FY2020/21.
At an appearance at the Macquarie Australia Conference on Tuesday, CEO Anthony Heraghty also said the use of tools such as artificial intelligence recommendations is boosting sales positively. The company reports on its active club memberships to outpace the modest growth in its store numbers. Online sales for most of its brands is now well into double digits.
Still, rising shipping costs have been a sore point for all retailers, including Super Retail. It says there will also be higher operating expenses in the second half of the financial year to make up for the projects deferred during COVID-19.
Investors, though, have been firmly focused on the positive news. Super Retail shares have more than doubled in value over the past 12 months.
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