Super Retail Group Ltd (ASX: SUL) shares are under pressure on Thursday morning.
At the time of writing, the ASX 200 retail stock is down 3% to $16.26.
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Why is the ASX 200 retail stock tumbling?
Investors have been selling the retail conglomerate's shares following the release of a trading update ahead of its annual general meeting.
According to the release, Super Retail's sales rose 4% during the first 16 weeks of FY 2025 compared to the prior corresponding period. This reflects a combination of new store openings and like for like sales growth of 2%.
The company's Supercheap Auto business delivered a result in line with the group. Total sales were up 4% and like for like sales rose 2%. Commenting on Supercheap Auto's performance, the company's CEO, Anthony Heraghty, said
Supercheap Auto performance has been driven by the auto maintenance category, including lubricants that benefited from the Best Performing Oils campaign. Sales have demonstrably slowed in New Zealand. Competitive intensity has increased, requiring an increase of promotional activity.
Macpac and BCF outperformed. The Macpac business was the standout with a 10% lift in total sales and a 4% lift in like for like sales. Heraghty said:
Macpac has delivered growth in insulation, rainwear and packs while challenging trading conditions in New Zealand have driven sales compression.
Whereas the BCF business reported a 6% lift in total sales and a 3% increase in like for like sales. Commenting on its performance, the ASX 200 retail stock's CEO said:
BCF has seen continued growth in fishing, caravan and 4WD benefiting from range expansion initiatives, showcased in the most recent superstore opened in Cannington.
Underperforming the group was the rebel business. It reported total sales growth of 2% and a 1% increase in like for like sales. Management highlights that rebel was cycling a very strong period a year ago when the FIFA Women's World Cup was taking place. Heraghty said:
rebel has delivered growth in footwear and apparel offsetting the impact of the FIFA Women's World Cup in the prior corresponding period. In preparation for peak trade, additional clearance activity has been executed to improve seasonal inventory position.
Loyalty programs
The ASX 200 retail stock also provided an update on its loyalty programs, which have been going through some changes. Heraghty commented:
The rebel active loyalty program has performed well since being launched in October 2023, with all key metrics ahead of business case. Customers who have redeemed loyalty points year-to-date demonstrate strong engagement with the program and, as anticipated, redemptions have reduced gross margin by circa 140bps in the current period.
We are pleased to advise that the new Supercheap Auto loyalty program, "Spend & Getathon", is now in-market. This investment in customer loyalty is expected to drive stronger share of wallet across our key customer segments, with a modest unfavourable impact to gross margins.
Outlook
Possibly weighing on the ASX 200 retail stock today has been its outlook commentary.
Management warned that cost of living pressures means the outlook for consumer spending remains uncertain. Its CEO concludes:
The outlook for the consumer remains uncertain, given ongoing cost of living pressure on household budgets. The Group's customer value proposition, the strength of the four core brands and the size of our customer loyalty club membership base means Super Retail Group remains well positioned to perform in retail market conditions where customers are carefully managing their spending and prioritising value-for-money purchases.
As always, the Group's first half result will be highly dependent on trading in the peak Christmas period.
Super Retail's shares remain up over 30% since this time last year.
