Super Retail (ASX:SUL) share price surges 5% higher on strong sales update

The Super Retail Group Ltd (ASX: SUL) share price is surging higher on Tuesday following the release of a strong trading update…

| More on:
A happy shopper lifts her bags high, indicating a rising share price in ASX retail companies

Image source: Getty Images

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

The Super Retail Group Ltd (ASX: SUL) share price has been a strong performer in morning trade on Tuesday.

At time of writing, the retail conglomerate's shares are up 5% to $12.20.

Why is the Super Retail share price surging higher?

Investors have been buying the company's shares following the release of a trading update ahead of its appearance at the Macquarie Group Ltd (ASX: MQG) Australia Conference 2021.

According to the release, Super Retail's strong form has continued since the end of the first half.

For the first 44 weeks of FY 2021, Super Retail delivered group like-for-like sales growth of 28%. This is an increase on the like-for-like sales growth rate of 24% that it achieved during the first half and was driven by growth across the business.

The release explains that like-for-like sales are up 21% for Supercheap Auto, 20% for Rebel, 59% for BCF, and 17% for Macpac.

Strong margins continue

Super Retail's Managing Director and CEO, Anthony Heraghty, was very pleased with the company's second half performance and notes that its margin improvements have been maintained. This is also likely to have given the Super Retail share price a boost today.

He said: "I am pleased to report that the Group has delivered strong Easter trading across all brands, particularly BCF and Macpac. Given the continued strength of customer demand, the Group has maintained relatively subdued levels of promotional activity in the second half. As a result, the gross margin improvement which the Group delivered in the first half has been maintained in the second half."

"The Group is in a well-stocked inventory position, which has benefitted from the arrival of orders made in the first half. Higher shipping costs in the second half have impacted inventory costs but these have been partly offset by favourable currency movements."

"As previously advised, second half operating expenses will reflect catch-up on projects deferred during COVID-19 and increased reinvestment in the business. Given the impact of COVID-19 on FY20 sales, the Group will now report FY21 like-for-like sales against both FY20 and FY19 trading, to enable a comparison with non-COVID trading conditions," he concluded.

The Super Retail share price is now up over 100% since this time last year.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Super Retail Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a nervous, but positive, Tuesday for ASX investors.

Read more »

two colleagues high five each other as they sit side by side at a long desk in front of their laptop computers in an office environment.
Share Gainers

Why Bapcor, Ramelius, Sandfire, and WIA Gold shares are rising today

These shares are having a better day than most on Tuesday. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors started the week off in a good mood today.

Read more »

Excited couple celebrating success while looking at smartphone.
Share Gainers

Why Bellevue Gold, Bubs, Clarity Pharmaceuticals, and Regal Partners shares are rising today

These shares are starting the week on a positive note.

Read more »

Two people lazing in deck chairs on a beautiful sandy beach throw their hands up in the air.
Travel Shares

Guess which ASX All Ords travel stock just rocketed 17% on an earnings upgrade

Investors are piling into the ASX All Ords travel stock today. Here's what's happening.

Read more »

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

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »

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

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. But why?

Read more »