Super Retail Group’s Sales Growth and Margins On Track in Core Segments; FVE Unchanged at 7.70

Over the first 16 weeks of fiscal 2018, like-for-like sales growth in Super Retail’s two key segments, auto parts and sporting goods, tracked with our estimates for the full year, and were virtually unchanged from the growth rates exhibited in the first seven weeks of the year. Comparable sales in leisure retailing slowed markedly from the first seven weeks, but the segment is less material to the group. We estimate the leisure segment to account for only 11% of group EBIT in fiscal 2018. Operating margins in the auto parts segment and the slowing leisure segment increased, in line with our expectations. We anticipate EBIT margins in the sporting goods segment to also increase in fiscal 2018, due to material sourcing, marketing, and administration synergies from the Rebel-Amart Sports integration. The last six Amart stores are expected to be fully converted to the Rebel brand by the end of October 2017.