Super Retail Group Reports 0.4% H2 Like-for-Like Sales Growth and $66 Million Cost Outlook

Sales Growth Slows Amid Geopolitical and Inflation Pressures

Super Retail Group (ASX:SUL) has revealed a muted sales performance in the second half of FY26, with group like-for-like (LFL) sales growth slowing to 0.4% over weeks 27 to 44. The momentum across its four key brands was significantly hampered by the onset of the Middle East conflict, compounded by inflationary pressures such as rising fuel prices and interest rates. Consumer caution was particularly evident during the critical Easter trading period, a season that typically drives strong retail activity.

Despite the headwinds, Supercheap Auto and Rebel managed to increase their market share. Supercheap Auto’s share gain in the auto category was notable during the March quarter, even as discretionary categories like power tools softened. Rebel’s resilience came from sustained demand in men’s wear, recovery gear, and football segments, although growth in higher-value sporting equipment and performance footwear was subdued amid heightened competition.

Outdoor Brands Bear the Brunt of Fuel and Calendar Disruptions

BCF was the most adversely affected brand, with elevated fuel prices and supply constraints, especially in regional areas, dampening customer participation in outdoor activities over Easter and school holidays. This was exacerbated by a calendar quirk separating Easter and Anzac Day, which spread the impact across regions and product categories. Macpac, which had demonstrated strong momentum earlier in the year, also experienced a slowdown in outdoor activity during March and April, even as it prepared for its peak winter trade season in the fourth quarter.

These challenges come after a period of robust growth for the group, with the first half of FY26 delivering record sales increases and a 4.2% revenue rise, albeit accompanied by margin pressures and rising costs, as detailed in the company’s prior revenue increase to $2.19 billion report.

Strategic Inventory Investment and Rising Operating Costs

In response to inflationary pressures and potential supply chain disruptions, Super Retail Group has deployed approximately $30 million in additional working capital, primarily to secure inventory ahead of anticipated price increases. This effort is focused on ensuring stock availability, particularly for Supercheap Auto, and distributing supply to regional markets vulnerable to fuel price volatility or rationing.

On the cost front, the group’s total unallocated and project-related expenses for FY26 are now forecast at $66 million, up from a previous estimate of $60 million. This increase reflects the acceleration of key initiatives, including the transition to a new Victorian distribution centre and the rollout of a new HR Core & Payroll system. Both projects remain on track for completion in the current half.

The elevated cost base follows a trend of rising operating expenses noted earlier in the year, which pressured net profit despite strong sales growth, as seen in the group’s profit dips amid rising costs update.