Super Retail has reported a fire and drought-related impact on its 'outdoor' division sales for the first half but several brokers question whether this curtailment of consumer activity has run its course.
Super Retail – which owns Supercheap Auto, Rebel Sport, Boating Camping Fishing (BCF) and Macpac – says first-half trading had been subdued, with sales in its outdoor goods divisions directly hit by bushfires and smoke haze concerns and it is looking at a fall in earnings before interest and tax of up to 9% for the six months to December.
One of the best performers in yesterday’s market-wide slide was the Super Retail Group which rode out the sluggish retail sector in the year to June and seems to have managed to overcome a wage underpayment scandal, even though there will be an added cost from it in 2019-20.
Credit Suisse considers it likely investors will look through the fire-related impact on stores in the first half. Nevertheless, more frequent and extreme events have the potential to affect retailer performance.
First half results revealed solid margins and steady sales and Deutsche Bank observes the recently-acquired Macpac business produced a good result that reflects significant investment undertaken in the supply chain over the last 2-3 years.
Sales growth was recorded across all divisions over the first 16 weeks of FY18. This is broadly in line with UBS forecasts for the first half, with automotive business a touch stronger and sports a touch softer.