Super Retail Group (ASX:SUL) reported record first-half sales for fiscal 2026, but profitability declined as the retailer absorbed higher project-related costs and faced mixed conditions across its brand portfolio. Chief Executive Officer and Managing Director Paul Bradshaw, presenting his first results since taking the role on Nov. 1, said the group delivered positive like-for-like sales growth in “an increasingly competitive retail environment,” supported by continued store expansion and growing engagement in loyalty programs.
Half-year financial performance
Group revenue rose 4.2% to AUD 2.2 billion, driven by 2.5% like-for-like growth and a 1.7% contribution from new stores. Gross margin declined 20 basis points to 45.4%.
The board declared a fully franked interim dividend of AUD 0.32 per share, in line with the prior year interim and within the group’s stated 55%–65% payout range of underlying earnings.
Super Retail Group ended the half with a net cash position of AUD 107.8 million and no drawn bank debt, supported by strong cash generation. CFO David Burns said operating cash flow increased 7% year over year to AUD 416 million, and operating cash conversion was 125%. Capital expenditure totaled AUD 62 million, down from the prior corresponding period, which Burns attributed to the timing of project activity being weighted toward the second half.
Profit pressure tied to project costs
Bradshaw said the decline in profit before tax was primarily driven by an increase in the cost of doing business as a percentage of sales, with project costs a notable factor. Operational outcomes contributed a net AUD 1.3 million decline in PBT for the half, as gains from Supercheap Auto and Macpac were offset by declines at rebel and BCF, alongside a modest improvement in corporate costs.
Project outcomes contributed AUD 11.5 million to the year-on-year PBT decline in the half. The company reiterated guidance for two major FY2026 projects:
- Duplication costs associated with the new national distribution center in Victoria
- Implementation of a new HR core and payroll system
Management expects the combined cost of those two projects to be approximately AUD 29 million in FY2026, with about AUD 15 million incurred in the first half.
Brand performance: strengths at Supercheap Auto and Macpac, challenges at rebel and BCF
Supercheap Auto delivered what management described as a “solid performance,” maintaining momentum from the prior year’s second half. Sales increased 5% to AUD 813 million, with like-for-like sales up 3.5% (3.7% in Australia and 2.1% in New Zealand). Bradshaw said the brand maintained gross margin despite an “elevated promotional environment,” while the cost of doing business remained flat as a percentage of sales. Profit before tax rose 4.5% to AUD 102 million, with a PBT margin of 12.6%. The business also completed more than 500,000 fitments in the half, up 15% year over year, and the customer Net Promoter Score increased to 75 from 68.
rebel posted like-for-like growth but saw profit decline amid promotions, property costs, and inventory availability issues. Total sales increased 4.8% to AUD 740 million and like-for-like sales rose 3.8%, driven by higher transactions. However, gross margin fell 40 basis points due primarily to increased promotional activity, and cost of doing business rose as a percentage of sales, reflecting higher property-related expenses (including larger new stores such as Bondi Junction and Broadway) and elevated network activity. Profit before tax declined 11.4% to AUD 53 million. Bradshaw said rebel did not consistently have sufficient depth of inventory in key ranges and sizes during peak trading, citing supplier disruptions and internal planning and execution shortcomings, which he said left “sales on the table.”
BCF produced sales broadly in line with a record prior year but posted a modest like-for-like decline. Total sales rose marginally to AUD 520 million, while like-for-like sales declined 1.6% due to fewer transactions, particularly in marine, fishing and water sports categories. Bradshaw attributed the weakness to environmental disruption, including an extended algae bloom in South Australia and coastal conditions in Victoria that he said had not been seen in more than 20 years. Segment gross margin improved 20 basis points, but PBT decreased 12.3% to AUD 39 million. The brand opened one new superstore in Palmerston, Northern Territory, with management describing early performance as tracking well. A new superstore at Taren Point in New South Wales is planned for the second half.
Macpac delivered a “standout performance,” with sales up 13.1% to AUD 122 million and like-for-like growth of 7.8% (8.9% in Australia and 5.9% in New Zealand), driven by increases in both transactions and average transaction value. Gross margin declined 60 basis points due to clearance activity early in the half to manage seasonal inventory. Segment PBT rose AUD 5.4 million to AUD 7.1 million, and PBT margin improved 420 basis points to 5.8%.
Loyalty, store network, digital, and supply chain updates
Bradshaw said loyalty metrics continued to strengthen, with the group adding 1 million active club members over the past 12 months to reach 13 million members. Club members now represent almost 85% of group sales. Group club member Net Promoter Score improved to 74 from 71.
The retailer opened 16 new stores in the first half and plans to open another 12 in the second half. Most first-half activity was at rebel and Supercheap Auto, while BCF’s store activity is expected to be weighted toward the second half.
Online sales grew 9% to AUD 312 million, representing 14% of total sales. Click & Collect—described as the most profitable online channel—accounted for 48% of online sales, and management said 93% of sales are completed in store.
Burns said the new Victorian distribution center is open and operational and is currently serving rebel stores in the southern states “with no disruption to fulfillment.” Operational testing of automated capabilities was completed in the period, with automation due to come online in the second half. The remaining brands are scheduled to transition to the new facility over the calendar year, which management said should improve online and home delivery capabilities and drive operating efficiencies and working capital savings once fully operational.
Second-half trading update and outlook commentary
Bradshaw said like-for-like sales momentum was positive in the first eight weeks of the second half. Supercheap Auto continued to deliver solid growth, led by stronger results in Australia and customer response to ranging initiatives. Macpac maintained strong momentum, with focus shifting to the peak winter trading period.
BCF returned to like-for-like growth, which Bradshaw linked to moderating headwinds from the first half and a strong in-stock position at the end of December. rebel’s like-for-like growth remained impacted by inventory availability challenges following supply chain disruptions at several key suppliers, though Bradshaw said promotional activity had moderated and actions to improve availability were underway.
During the Q&A, management also discussed currency hedging, with Burns stating the group typically hedges 55%–75% of exposure for the next four months and 0%–50% for the subsequent eight months. He said the company expects to benefit from the higher currency environment over time under that policy, potentially becoming a stronger tailwind as the year progresses.
Bradshaw said the company plans to outline a new five-year strategic vision at an Investor Day in June, and he emphasized that management is focused on organic growth opportunities across the group’s categories.
About Super Retail Group (ASX:SUL)
Super Retail Group Limited engages in the retail of auto, sports, and outdoor leisure products in Australia and New Zealand. It offers automotive parts and accessories, handyman items, and tools and equipment, and marine and motorbike products, including batteries, car care products, exterior accessories, hand and power tools, in-car navigation systems, in-car stereo equipment, lighting and electrical products, oils, filters and additives, outdoor equipment and accessories, seat covers and interior accessories, spare parts, paints and panels, and performance products.
