Why the Super Retail share price is marching on today

Posted: 4 May 2021 12:40 pm
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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.

Looking to buy Super Retail shares?

You can buy Super Retail Group shares through an online share trading platform. Choose from the dozens available for Australian investors. You should compare the features and fees here before choosing the right one for you.

Some trading platforms offer US stocks only, so make sure to select a platform that offers ASX-listed stocks.

Looking for a low-cost online broker to invest in the stock market? Compare share trading platforms to start investing in stocks and ETFs.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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