After a reasonably positive start to the day the Super Retail Group Ltd (ASX: SUL) share price has crashed lower in early afternoon trade.
At the time of writing the retailer's shares are down a sizeable 12.5% to $8.18.
Why are Super Retail's shares crashing lower?
Super Retail is holding its annual general meeting and has provided investors with an update on its performance and announced a change in the top job.
In respect to the latter, managing director and chief executive officer Peter Birtles will retire in the second quarter of the 2019 calendar year. The exact timing of his departure will be determined by the outcome of an executive recruitment process.
Unfortunately, this news has overshadowed the company's reasonably positive start to FY 2019.
Although like for like sales have slowed a little since the start of the year, each business has reported growth in this metric over the 16 weeks to October 20.
The Macpac business has been the best performer in its portfolio and has seen like for like sales accelerate since the start of the year. As of October 20, Macpac's like for like sales were up 8.4% and total sales were up 17.6% on the prior corresponding period.
The next best performer was its Supercheap Auto business which reported total sales growth of 4.1% and like for like sales growth of 3.1%.
Elsewhere, the Rebel business posted like for like sales growth of 2.4% and total sales growth of 4%, and the BCF business has seen like for like sales rise 2.4% and total sales increase 1.7%.
Also taking the shine of this positive performance were comments from Mr Birtles. While he was pleased with the positive start to the year, he warned that there have been "signs that the retail consumer is being more cautious."
As a result, he stressed that the company would act carefully to "get the balance right between driving sales and managing margin as we move into the major trading period of the year."
Should you buy the dip?
While a change of CEO can be disruptive and is a reason to be concerned, I thought that Super Retail's update was one of the best I'd seen in the retail sector so far in FY 2019.
So with its shares changing hands at under 11x estimated forward earnings, I think it could be worth considering an investment at these levels. Especially with its generous dividend yield.
Overall, the retail sector is certainly looking like a hard place to invest, but I believe the risk/rewards on offer with Super Retail, Adairs Ltd (ASX: ADH), and Kogan.com Ltd (ASX: KGN) are compelling right now.
