Why is the ARB share price beating the ASX 200 today?

The S&P/ASX 200 Index (ASX: XJO) is having a fairly lacklustre start to the trading week so far this Monday. At the time of writing, the ASX 200 has slipped by 0.19%, which puts the index down to just above 7,540 points. But it’s a somewhat different story when it comes to the ARB Corporation Ltd (ASX: ARB) share price.

ARB shares are in the green today. The ASX 200 offroad supplies retailer has gained a comfortable 0.63% so far this session, putting ARB shares at $33.61 each.

So what’s helping ARB shares outperform the broader market by around 1% this Monday?

Well, a company update released to the markets just before open this morning is probably to thank.

This market update covers the company’s performance over the six months to 31 December 2022.

ARB share price beats the ASX 200 after bullish market update

ARB Corporation reported that over the period, it has brought in $340.9 million in sales revenue. That was a 5.1% slide compared to the previous corresponding period in 2021.

However, ARB also reported that the second quarter of the half “was slightly ahead of the same period last year, an improvement from the 10.0% decline in the first quarter reported at the 2022 AGM”.

Meanwhile, the company reported that its profit before tax will come in between $64 million and $64.6 million. That would be a decline of 29.7% against the previous corresponding period. This “reflects the lower sales and the inflationary impact on the Company’s cost base in particular”.

However, ARB also stated the following:

Pleasingly, inflationary pressure on the Company’s cost base moderated throughout 2Q FY2023 with freight and steel costs retreating towards more historical levels. Furthermore, recent sales price increases will improve margins and recruitment opportunities appear to be improving despite continuing to be challenging.

Turning to the future, ARB was more upbeat. The company stated that it “maintains a positive short term outlook based on its continuing strong customer order book, which is in line with order levels throughout 2022″.

ARB also stated that it “is focused on supporting export markets and pursuing various market opportunities whilst managing input costs and global supply chain pressures“.

The company also pointed to its new product development planned for 2023. That’s in addition to its “increased distribution and manufacturing capacity” in 2023 as signs that its fortunes were improving.

So it seems investors were buoyed by what the company had to say today. ARB Corporation will report its full half-yearly results for the first half of FY2023 on 21 February.

In the meantime, the current ARB Corporation share price gives this ASX 200 retail share a market capitalisation of $2.76 billion, with a dividend yield of 2.11%.

The post Why is the ARB share price beating the ASX 200 today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ARB Corporation. The Motley Fool Australia has recommended ARB Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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