Super Retail first-half profit drops, shares slide
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The news: Supercheap Auto and Rebel-owner Super Retail Group has reported a drop in first-half profit and margins and flagged higher costs for the full year, sending its shares sharply lower.
The numbers: Net profit for the 26 weeks to 28 December was down 9.5% to $129.8 million, with like-for-like sales up 1.8% over the period. The group will pay an interim dividend of 32 cents a share, similar to a year ago.
Shares in the company were down nearly 14% to $13.99 in early trading.
The context: Chief executive Anthony Heraghty said ongoing inflationary pressures on the cost of doing business impacted profit growth and margins during the period. Cost of doing business as a percentage of sales increased 30 basis points to 35.5% due to higher wages, occupancy costs and network expansion. As a result, gross margin was down 70 basis points from a year ago.
The group said like-for-like sales momentum has been positive in the first 7 weeks of the second half, with growth of 5%, led by gains at its BCF stores. Gross margins are tracking above the year ago period, despite an ongoing subdued consumer environment. Full-year group and unallocated costs are expected to be higher at $42 million, compared to $36 million in FY24.
The source: ASX
