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Super results for Super Retail Group

The market has shown mercy on much of the retail industry over the last six months, with many retailers such as JB Hi-Fi Limited (ASX: JBH) bouncing off their June-July lows to deliver index smashing returns and fantastic half year reports. The results of Super Retail Group Limited (ASX: SUL) for the half year were no different.

Despite the extreme pressures placed on the retail industry over recent years, investors have largely remained faithful to the group, with its share price growing consistently since the global financial crisis experienced in 2009, gaining 430% in that time.

Super Retail is a multinational retailer with exposure in the Auto, Leisure and Sports divisions, and comprise of eight retail brands including the very successful Supercheap Auto, Rebel Sport, Boating Camping Fishing (BCF), and Ray’s Outdoors.

Aiming to be one of the top five Australasian retailers, the group functions to maintain high staff retention and job fulfillment in order to then provide higher levels of customer service than its competitors. This approach has, thus far, proven to be quite resilient to market conditions, delivering consistent earnings growth for the retailer.

The group again impressed investors with astonishing net profit and revenue growth of 73.5% and 36.6% for the period, respectively. The retailer’s $1.04 billion revenue can be largely accredited to growth in the auto and sports divisions, whilst the company’s Leisure Retailing division grew 14.3% from 1H12 – a result which was largely influenced by the opening of 12 new Boating, Camping, Fishing (BCF) stores.

The company also announced an interim dividend of 17c per share. Together with the final dividend payment, this offers a 3.1% yield – very attractive considering the group’s prospects to continue growing and opening new stores.

Foolish takeaway

With a focus on customer satisfaction, staff retention, and shareholder returns (not to mention store growth and consistent financial reports), Super Retail Group presents as a very strong business. However, with a P/E ratio of 20, Super Retail Group is quite expensive, compared to the P/E ratio of other retailers, such as Myer Holdings (ASX: MYR) and Harvey Norman Holdings (ASX: HVN), being 12 and 14 respectively. Time will tell whether investor’s expectations over the company’s future are irrational, or if the retailer’s business approach can continue to defy the wrath of online retailing.

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More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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