Super Retail share price rockets after surprisingly strong FY 2020 performance

The Super Retail Group Ltd (ASX:SUL) share price is storming higher on Friday after revealing a stronger than expected performance in FY 2020…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In morning trade on Friday the Super Retail Group Ltd (ASX: SUL) share price is storming higher. This follows the release of an update on its expectations for FY 2020.

At the time of writing the retailer's shares are up 12% to $9.07.

How did Super Retail perform in FY 2020?

Super Retail revealed that its sales rebounded strongly during final quarter following the easing of COVID-19 restrictions.

Following a 26.2% decline in monthly like-for-like sales in April, monthly like-for-like sales increased by 26.5% in May. Pleasingly, this positive trading momentum continued in June with an increase in monthly like-for-like sales of 27.7% compared to the prior corresponding period.

As a result, Super Retail recorded like-for-like sales growth of 3.6% and total sales growth of 4.2% in FY 2020. Total revenue is expected to be approximately $2.82 billion.

What were the drivers of its sales growth?

The Supercheap Auto business was the star of the show in FY 2020. It recorded a 6.3% increase in like-for-like sales and a 7.6% jump in total sales.

This was supported by its Rebel business, which delivered like-for-like sales growth of 2.7% and a 3.3% increase in total sales.

Also performing positively was the BCF business. It delivered 3% like-for-like sales growth and a 4% lift in total sales.

Management advised that these businesses benefited from a significant uplift in domestic tourism and travel, personal fitness, and outdoor leisure activities.

However, not all of Super Retail's businesses performed as positively. The Macpac business was out of form and recorded a 9.1% decline in like-for-like sales and a 5% reduction in total sales.

What about its earnings?

Super Retail expects its pro forma segment earnings before interest, tax, depreciation, and amortisation (EBITDA) to be between $327 million and $328 million in FY 2020. This compares to FY 2019's segment EBITDA of $315 million.

Whereas pro forma segment earnings before interest and tax (EBIT) is expected to be between $235 million and $236 million. This will be an increase from $228 million in FY 2019.

And on the bottom line, pro forma normalised net profit after tax is expected to be between $153 million and $154 million. This compares to FY 2019's net profit after tax of $153 million.

Management advised that these pro forma figures exclude one-off pre-tax abnormal items of approximately $54 million. These items include the remediation of team member underpayments, the exit of certain non-core businesses, support office restructure costs, and the accelerated write down of certain assets.

Super Retail Group CEO and Managing Director Anthony Heraghty said: "Given the volatile trading environment, we are very pleased with these results."

"The Group's omni-retail channel business strategy has enabled our businesses to adapt quickly to changing consumer behaviour during COVID-19 and delivered a resilient trading performance. We look forward to updating the market with further detail on our 2019/20 financial results at our full year results presentation," he concluded.

Should you invest $1,000 in Super Retail Group Limited right now?

Before you buy Super Retail Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Super Retail Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another tough day for investors this Tuesday.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Dimerix, Evolution Mining, Inghams, and NextDC shares are charging higher today

These shares are rising when many are falling today. But why?

Read more »

A neon sign says 'Top Ten'.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough trading day for ASX stocks this Monday.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why 4DMedical, Gold Road, Syrah, and Tyro shares are racing higher today

These shares are starting the week strongly. But why?

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

2 ASX gold stocks racing higher in Monday's sinking market

Investors are sending these ASX gold stocks flying higher on Monday. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords share just rocketed 19% on BIG news

Investors are sending this ASX All Ords share flying on Monday. But why?

Read more »

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy finish to the week for ASX shares this Friday.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX All Ords stocks rocketing higher this week

Investors sent these five ASX All Ords stocks soaring this week. But why?

Read more »