Super Retail Group FY24 Earnings Call Highlights

Super Retail Group (ASX: SUL) soared to all-time highs on Thursday after reporting a solid FY24 result plus an unexpected special dividend of 50 cents per share.

FY24 Earnings Summary

• Gross sales up 2% to $3.9bn

• Gross margin up 10 bps to 46.3%

• Statutory NPAT down 9% to $240m

• Normalised NPAT down 11% to $242m

• Fully franked final ordinary dividend of 37 cents plus special dividend of 50 cents

• Net cash position of $218m with no debt

• FY25 trading update (first seven weeks): Group like-for-like sales up 3%

To add some perspective, the net profit figures were in-line with Macquarie expectations (13-May). But the total FY24 dividend (ordinary plus special) of 119 cents per share was well-above the 68.7 cents expected.

Earnings Call Highlights

The below topics have all been answered by CEO Anthony Heraghty and CFO David Burns.

FY24 performance: "The group delivered record sales of $3.9 billion, achieving sales growth of 2%. Pleasingly, in a competitive environment, we were able to increase gross margin by 10 basis points to 46.3%."

Inflationary pressures: "Cost of doing business as a percentage of sales increased by 120 basis points due to inflation in rent, electricity, and wages, partially mitigated by cost control initiatives ... While inflation appears to be gradually easing, we expect continued upward pressure on our cost base in fiscal 2025."

Promotional activities: "A 10-basis-point improvement in gross margin to 46.3% is a pleasing outcome, given that we've absorbed the impact of the new loyalty program at Rebel and returned to a normal promotional environment."

Consumer spending environment: "Flat like-for-like sales reflected the impact of higher interest rates and increased cost of living, which dampened consumer sentiment and spending."

Online vs. in-store sales: "Our online sales grew by 9% to $485 million, driven by a reignition of growth. However, 93% of transactions remain in-store, highlighting the ongoing value of our national store network."

Analyst Q&A Highlights

Gross margin outlook: "Promotion looks to be back to normal and stable. So, we're not calling out any specific upward or downward movement to gross margin position driven by any material factor."

M&A strategy: "We've been very clear that the strategy is core four ... if there was an asset out there that delivers against that core four strategy or enhances one of the brands, we'd have our mind open to that."

Rebel Sports performance: "It's slowing, it's less worse. I wouldn't declare victory. But there's some early signs in some of the segments that we're seeing some reversal."

Rebel Sports and Footwear segment: "I'm feeling much more confident about footwear and apparel in that business ... That footwear change we pulled off last half was the most significant change in ranging in probably a decade."

Supercheap performance: "Tools have been good. We've been in that category for some time and we're just looking to improve our offer, make it more compelling and differentiated ... "We wouldn't call out any material change in tone, depth, or frequency."

This article was generated with the support of AI and reviewed by an editor.