Why Super Retail Group’s Revised FY25 Sales Signal a Strategic Shift
Super Retail Group has amended its FY25 sales growth figures while reporting improved like-for-like sales in the second half, alongside strategic investments in supply chain and store network expansion.
- Amended sales growth figures for weeks 27-44 and 1-44, with total group sales growth steady at 4.2%
- H2 FY25 like-for-like sales growth improved to 3.1%, driven by BCF
- New Truganina distribution centre nearing phased opening to enhance supply chain efficiency
- Continued expansion and optimisation of store network with focus on omni-retail capabilities
- Group and unallocated costs expected to rise due to payroll system replacement and DC transition
Amended Sales Growth Figures Clarify Performance
Super Retail Group (ASX: SUL) has updated its FY25 trading update, revising sales growth figures for the periods covering weeks 27-44 and weeks 1-44. While the total group sales growth for weeks 1-44 remains unchanged at 4.2%, the amendments provide a clearer picture of segment performance. Notably, like-for-like sales growth in the second half of FY25 has improved to 3.1%, up from 1.8% in the first half, largely propelled by strong momentum at BCF.
Segment Highlights and Market Conditions
The retail environment remains mixed. BCF continues to deliver robust sales, benefiting from strategic stock availability investments and a solid Easter trading period. Rebel has accelerated like-for-like growth despite a $5 million sales headwind from cyclone Alfred, with footwear and health & wellbeing categories performing well. Conversely, Macpac faces challenges due to its heavier exposure to New Zealand’s subdued retail conditions, focusing on inventory management ahead of its peak winter season. Supercheap Auto’s performance remains stable, with a slight decline in like-for-like sales but steady total sales growth.
Strategic Investments in Supply Chain and Store Network
Super Retail Group is advancing its omni-retail strategy through significant investments. The new semi-automated distribution centre in Truganina, Victoria, is nearing phased opening in the second half of FY25 and will fully replace existing Victorian DCs by FY26. This facility is expected to deliver cost efficiencies, reduce third-party logistics expenses, and enhance online fulfillment capabilities. Concurrently, the Group is expanding and optimising its store network, with over 774 stores across Australia and New Zealand, including new builds and refurbishments aimed at increasing store size and improving customer experience.
Cost Outlook and Operational Challenges
The Group anticipates higher operating costs in FY25 and FY26, driven by a major payroll system replacement and the transition to the new distribution centre. Total group and unallocated costs are forecast to rise to $42 million in FY25 from $36 million in FY24, with $29 million expected in FY26 due to duplicated expenses and project costs. These investments, while increasing short-term costs, are positioned to support long-term growth and operational efficiency.
Looking Ahead
Super Retail Group’s focus on leveraging its omni-retail model, digital capabilities, and supply chain enhancements aims to sustain its competitive edge in a challenging retail landscape. The amended sales figures and ongoing investments underscore a cautious but optimistic outlook as the Group navigates evolving consumer preferences and market conditions.
Bottom Line?
Super Retail Group’s strategic investments and revised sales data set the stage for a pivotal FY26 as cost pressures and growth opportunities converge.
Questions in the middle?
- How will the new distribution centre impact Super Retail Group’s cost structure and delivery capabilities long term?
- Can BCF’s strong momentum offset subdued conditions in New Zealand and challenges at Macpac?
- What is the expected timeline and impact of the payroll system replacement on operational efficiency?