Why the Super Retail Group Ltd (ASX:SUL) share price is flying

The Super Retail Group Ltd (ASX: SUL) share price has charged higher over the past 30 days, making it one of the top-performing shares on the ASX 200 during that time. The shares have gained 16% and trade at $8.34 today.

Super Retail Group is a specialty retail group that operates in three broad retail divisions. The Auto Segment, which includes the Super Cheap Auto business, is the largest of these, contributing 39% of revenue and just under half of group operating earnings (EBIT) in the six months ended 31 December 2017. The Sports segment, which includes Rebel, generated $503.8 million of sales during the half while the Leisure segment generated sales just shy of $300 million.

All up, the company reported revenue of $1.32 billion and EBIT of $113.6 million. Revenue was slightly above the same period from last year, while earnings were slightly lower. Indeed, the Leisure segment was the culprit for the lower earnings, with that business’ EBIT falling $4.2 million compared to the prior corresponding period.

The chart below summarises the results:

Source: Super Retail Group

Notably, Super Retail Group is also looking to revamp its presence in the Leisure segment and announced the major acquisition of the New Zealand-based Macpac in February. Macpac is expected to contribute circa $5 million to group earnings at the EBIT level in the year ending 30 June, with a greater contribution likely in the years beyond (the company was only consolidated into Super Retail Group’s accounts on 5 April, so its contribution this year is limited).

However, the most recent run-up in the SUL share price appears to have been caused by a trading update provided by the group earlier this month. Like-for-like sales growth accelerated in its Supercheap Auto and Rebel businesses in the 17 weeks to 28 April with the company saying its profit performance had been in line with expectations.

Super Retail’s shares currently trade for $8.34, compared to a 52-week low of $6.42 and 52-week high of $9.12. Its share price performance over the past 30-days compares to Bapcor Ltd (ASX: BAP) which has gained 13.6%, as well as JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) which have recorded a fall of 7% and gain of 2.3% respectively over the same period.

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Motley Fool contributor Ryan Newman owns shares of Bapcor. The Motley Fool Australia owns shares of Super Retail Group. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia owns shares of Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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