Shares in Super Retail Group have fallen after RBC Capital Markets analyst Michael Toner noted the company’s first-half profit guidance fell short of expectations. Super Retail Group is an Australian retailer that operates several well-known brands in the sporting, auto, and outdoor sectors. The company owns Supercheap Auto, Rebel, BCF, and Macpac, catering to a wide range of consumer needs.
Underlying profit before tax, guided at $172 million to $175 million, missed RBC’s estimates by 5.7 per cent and consensus estimates by 7.1 per cent. According to Toner, this was largely due to increased discounting and promotional activity within its Rebel sports merchandise chain. While total like-for-like sales grew 2.5 per cent, Supercheap Auto and Rebel saw growth accelerate, while BCF experienced a slowdown.
The outdoor retailer BCF was impacted by weather and environmental factors, particularly in Victoria and South Australia. Gross margins remained flat at the group level, which was weaker than anticipated. Macpac margins contracted due to clearance activity, and Rebel’s performance drove a roughly 13.7 per cent miss in profit before tax compared to consensus estimates.
Toner indicated that the market is likely to concentrate on the weaker margins, potentially signaling a negative trend for apparel retailer profitability in December. RBC Capital Markets maintains a ‘sector perform’ rating on Super Retail with a price target of $18.20. Shares in Super Retail were last trading down 6.7 per cent following the profit guidance announcement.
