Why Did Super Retail Group’s Profit Dip Despite Record $4.07B Sales?

• Record group sales up 4.5% to AUD 4.07 billion
• Statutory net profit after tax down 7.6% to AUD 221.8 million
• Final dividend of 34 cents and special dividend of 30 cents per share declared
• Store network expanded by 31 stores; online sales grew 8%
• Active club members increased 9% to 12.5 million
• Mixed brand performance with BCF and rebel outperforming
• Improved safety metrics and strong balance sheet with no drawn bank debt

Record Sales and Profit Pressures

Super Retail Group Limited (ASX – SUL) has delivered a milestone in FY25 with group sales surpassing AUD 4 billion for the first time, marking a 4.5% increase over the prior year. This growth was supported by an expanded store network and an 8% rise in online sales, reflecting the Group’s ongoing omni-retail strategy.

However, despite top-line strength, statutory net profit after tax fell 7.6% to AUD 221.8 million. The decline was primarily driven by margin pressures, including a 50 basis point dip in gross margin to 45.6%, and inflationary cost increases in wages, rent, and energy. Normalised profit before tax also declined 3.9% to AUD 329 million.

Dividend Payout and Capital Management

In recognition of the Group’s resilient financial position, the Board declared a fully franked final dividend of 34 cents per share, alongside a special dividend of 30 cents per share. Together with the interim dividend of 32 cents, shareholders will receive a total of 96 cents per share for FY25. The Group maintained a conservative balance sheet with no drawn bank debt and a cash balance of AUD 63 million at year-end.

Brand Performance and Customer Engagement

The Group’s four core brands showed mixed results. BCF and rebel posted strong sales growth of 7.9% and 4.8% respectively, buoyed by strategic initiatives such as BCF superstores and the rebel rCX store format. Conversely, Supercheap Auto and Macpac underperformed expectations, with Macpac facing challenging trading conditions in New Zealand.

Customer loyalty remains a key strength, with active club members growing by 9% to 12.5 million, now representing 79% of total sales. The Group’s customer Net Promoter Score improved to a record 71, underscoring enhanced customer satisfaction across channels.

Safety, Sustainability, and Strategic Outlook

Safety performance improved significantly, with the Total Recordable Injury Frequency Rate (TRIFR) decreasing by 17% to 12.1. The Group continues to advance its 2030 Sustainability Framework, reporting progress on emissions reduction and waste diversion targets, and preparing for mandatory climate reporting under new Australian standards.

Looking ahead, the Board announced a strategic review to update the Group’s framework through 2030, aiming to adapt to evolving retail dynamics and consumer trends. Investments in store network expansion, loyalty programs, and digital capabilities will continue, with capital expenditure targeted at AUD 155 million in FY26.

Governance and Legal Matters

The Board welcomed two new Independent Non-Executive Directors during FY25, enhancing governance with diverse expertise. The Group is vigorously defending proceedings initiated by the Fair Work Ombudsman related to employment matters, with a provision of AUD 14.1 million recognised for potential liabilities. No material impact on operations is expected pending resolution.

Executive remuneration outcomes aligned with Group performance, with short-term and long-term incentives reflecting financial results and strategic achievements.

Bottom Line?

Super Retail Group’s FY25 results underscore resilience amid challenges, setting the stage for a strategic reset and renewed growth focus.

Questions in the middle?

• How will Super Retail Group’s strategic review reshape its growth trajectory through 2030?
• What are the potential financial and operational impacts of the ongoing Fair Work Ombudsman proceedings?
• Can margin pressures be alleviated in FY26 amid inflation and competitive retail dynamics?