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Super Retail Group Ltd SUL

Morningstar Rating
A$12.58 −0.07 (0.55%)
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Company Report

Super Retail: Higher Labor Costs Point to Falling Earnings

Trading momentum is soft across all of no-moat Super Retail’s brands: Supercheap Auto, Rebel, BCF, and Macpac. In the first 10 months of fiscal 2024, group sales are up 2% on the previous corresponding period. Sales growth is deteriorating in the second half of fiscal 2024, as expected, but tracking ahead of our prior forecast. We marginally upgrade our sales estimates by 2% in fiscal 2024. Gross margin is also holding up better than we had anticipated, flat with the previous corresponding period. We upgrade our fiscal 2024 adjusted earnings per share estimate by 5% to AUD 1.06. However, our long-term estimates are largely unchanged.

Price vs Fair Value

SUL is trading at a 68% premium.
Price
A$12.65
Fair Value
A$82.10
Uncertainty
Medium
1-Star Price
A$44.52
5-Star Price
A$2.16
Economic Moat
Hpkgz
Capital Allocation
Vmdmjzrxm

Bulls Say, Bears Say

Bulls

The group boasts an impressive management team, evidenced in continuous working-capital improvements and driving cost efficiencies.

Bears

The core business in automotive has limited growth opportunities. Increasing complexity of cars means motorists will be less inclined to maintain their own vehicles, weighing on sales for the Supercheap Auto division.

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Trading Information

Previous Close Price
A$12.65
Day Range
A$12.4012.74
52-Week Range
A$10.5617.11
Bid/Ask
A$12.53 / A$12.58
Market Cap
A$2.84 Bil
Volume/Avg
1.8 Mil / 754,701

Key Statistics

Price/Earnings (Normalized)
11.12
Price/Sales
0.75
Dividend Yield (Trailing)
6.01%
Dividend Yield (Forward)
6.01%
Total Yield
6.01%

Company Profile

Super Retail operates in Australia and New Zealand selling auto parts, sporting goods, and outdoor leisure equipment. The group generates revenue of about AUD 3.5 billion. There are generally two to four larger players in each category in which the firm operates, with Super Retail the market leader in all three categories. The firm has been corporately active historically, adding to the sporting goods category in fiscal 2012 and acquiring outdoor specialist Macpac of New Zealand in 2018.
Sector
Consumer Cyclical
Industry
Specialty Retail
Stock Style Box
Mid Value
Total Number of Employees
3,604

Competitors

Valuation

Metric
SUL
AZO
BAP
Price/Earnings (Normalized)
11.1218.9314.77
Price/Book Value
2.121.28
Price/Sales
0.752.860.71
Price/Cash Flow
4.0816.076.91
Price/Earnings
SUL
AZO
BAP

Financial Strength

Metric
SUL
AZO
BAP
Quick Ratio
0.350.090.87
Current Ratio
1.170.822.50
Interest Coverage
8.079.444.76
Quick Ratio
SUL
AZO
BAP

Profitability

Metric
SUL
AZO
BAP
Return on Assets (Normalized)
8.22%16.83%4.68%
Return on Equity (Normalized)
19.70%8.74%
Return on Invested Capital (Normalized)
12.32%46.39%6.94%
Return on Assets
SUL
AZO
BAP
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