The Super Retail Group Ltd (ASX: SUL) share price is down 5% after the retailer announced a trading update for the second half of FY24.
Super Retail was presenting at the Macquarie Australia conference today, which included its sales update and details of the group's 2024 enterprise agreement.
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Sales update
The business reported a few different sales statistics.
For the second half of FY24, like-for-like (LFL) sales growth for weeks 27 to 43 showed:
- Supercheap Auto LFL sales rose 1%
- Rebel LFL sales fell 2%
- BCF LFL sales declined 5%
- Macpac LFL sales increased 3%
- Overall group LFL sales dropped 1%
Super Retail also reported total sales growth for weeks 1 to 43 (FY24 year to date):
- Supercheap Auto sales increased 3%
- Rebels sales fell 2%
- BCF sales grew 5%
- Macpac sales went up 2%
- Total group sales rose 2%
The retailer's total group sales across March and April were approximately 1% higher than the prior corresponding period.
Supercheap Auto benefited from strong demand in auto maintenance categories, including lubricants, power and car detailing.
Rebel footwear sales improved thanks to the introduction of new and expanded brand ranges (including Hoka and On), though apparel demand remains "subdued".
BCF's LFL sales reflected "softer trading in the key Easter period and the cycling of clearance activity" in the prior corresponding period.
Macpac's sales growth was driven by a "strong performance" in New Zealand as inbound travel boosted sales in key tourist destination stores.
It also revealed the group gross profit margin is "in line" with the prior corresponding period. The business has opened 20 stores and closed four in FY24 so far. It expects to open another seven stores before the end of FY24.
2024 enterprise agreement
Super Retail said its 2024 retail and CCC Enterprise Agreement (EA) has been endorsed by its Australian team members and approved by the Fair Work Commission (FWC). The EA covers a three-year term, starting from 14 July 2024.
The new EA will see all wages-paid team members across the group's Australian retail stores receive higher penalty rates and an increase in base pay rates to the tune of a 5.25% increase in FY25, 3.25% in FY26 and 3.25% in FY27.
The EA applies to the store wages component of the group's employee expenses (not support office employee expenses) and excludes retail management. Prior to the EA, on 2 July 2023, the group increased retail team member base pay rates by 3%.
Eligible team members will also receive a one-off payment equivalent to 2.75% of their annual base pay, with this to be paid before the end of FY24.
Management comments
Super Retail managing director and CEO Anthony Heraghty said:
Given current challenges around inflation and interest rates, our customers are managing their spending carefully and becoming increasingly value focused.
While store foot traffic and transaction volumes continue to grow, ongoing cost of living pressure is impacting number of items per sale.
Super Retail share price snapshot
Since the start of 2024, the Super Retail share price has dropped 18%.
