Super Retail share price edges higher on FY20 result

The Super Retail Group Ltd (ASX: SUL) share price initially bounced as high as $10.97 in early trade, following release of the company’s FY20 results. At the time of writing, however, the Super Retail share price has fallen back to $10.67, representing a modest 1.04% gain for the day so far. 

The retail powerhouse has clawed its way back from as low as $3.54 when it bottomed out in March this year, providing those who got it at the bottom with a whopping 201% gain in just 5 months.

Let’s take a look at the specifics of the company’s FY20 performance.

What’s moving the Super Retail share price? 

In case you were unaware, Super Retail is one of Australia’s largest retail operators, boasting household brand names such as Rebel Sport, Supercheap Auto, and Boating Camping and Fishing.

According to this morning’s release to the market, total revenue for the group increased by over 4% to $2.83 billion. This was largely assisted by a boost to online sales of $290 million, which represented an increase of 44%. Likewise, earnings before interest, taxes, depreciation and amortisation (EBITDA) improved by 4.3% to $328 million.

In addition, underlying net profit after tax for FY20 increased by 1% to $154 million, and Super Retail will pay out a final dividend (fully-franked) of 19.5 cents per share. The group decided not to give its shareholders a pay day earlier in March due to the uncertainty proliferated by COVID-19

Notably, the FY20 fourth quarter saw an impressive rebound in consumer demand for Super Retail’s products, leading to a 27% rise in group like-for-like sales in May and June.

This trend appears to be emblematic of the retail industry more broadly, with the Australian Financial Review reporting last week that Australians had spent 30% more on household goods in July this year compared to 2019. The timing is hardly a coincidence, with tailwinds including the extension of JobKeeper and other government programs, the processing of FY20 income tax returns, and the extra money saved from possible mid-year overseas holidays all benefitting the retail sector.

In commenting on the company’s outlook for FY21, Super Retail’s CEO said, “We are well positioned to benefit from consumer trends emerging from the pandemic, including the channel shift to online, uptake in DIY auto repairs and household projects, increased focus on personal health and wellbeing, and greater demand for domestic travel and outdoor leisure activities.”

Foolish takeaway

A key question for Super Retail relates to whether Australia’s latest retail shopping spree is sustainable. Having said that, today’s results reflect a strong performance considering the circumstances of the past 12 months. The ease with which Super Retail has pivoted to online sales has also helped to bolster the company’s FY20 results. 

More reading

• Super Retail share price leaps 21% in August ahead of Monday’s FY20 results
• What experts are saying about JB Hi-Fi’s profit results as the stock surges to record
• 2 ASX retail shares on my radar in 2020
• Super Retail and 2 other ASX retail shares to watch in August
• Why you should buy ASX shares in this resilient market

Motley Fool contributor Toby Thomas has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Super Retail share price edges higher on FY20 result appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3ldPqEw