The Shaver Shop Group Ltd (ASX: SSG) share price is surging today. This comes after the company provided a positive update to its trading performance.
At the time of writing, the Shaver Shop share price is up 14.1% to $1.21.
What's driving the Shaver Shop share price?
The Shaver Shop share price is driving higher following the release of its robust first-half year result.
In today's release, Shaver Shop announced that it has achieved growth in key categories, underpinned by favourable trading conditions.
For the period ending 31 December, the personal grooming retailer delivered an increase of 12.4% for total sales in Q2. Like-for-like sales across the business improved 13.7%, and online sales represented a 64.7% jump for the quarter. The latter was the driving force behind the like-for-like sales performance.
A snapshot for the upcoming half-year result indicated that Shaver Shop continued to grow in all business segments. Total sales lifted 15.2%, and like-for-like sales surged 17.3% over the prior corresponding period. Most notably, demand for shopping over the internet rocketed, with a 100.2% increase for online sales, reflecting 30.3% of total sales.
The company also revealed that its gross margin profit is projected to reach more than 200 basis points from the first-half of the year. This is due to management executing strategic decisions in balancing volume growth and profit margins during key holiday periods.
Management commentary
Shaver Shop managing director and CEO Cameron Fox welcomed the result,saying:
I am exceptionally proud of our team and our first half performance. Shaver Shop has now delivered 24 months of consecutive like for like sales growth, underpinned by the accelerating trends towards DIY personal care solutions. Our customer database now exceeds 600,000 members and our online sales more than doubled in the first half to $37.5 million reflecting our position as the leading omni channel retailer in our core categories.
Mr Fox said Shaver Shop teams across Australia and New Zealand had "remained focused and resilient", consistently delivering "exceptional customer service during an incredibly uncertain time".
With in-store sales conversion more than 50% and average transaction values increasing more than 10%, our store teams were able to more than offset the 20% plus decline in outside foot traffic we saw in December. We expect our first half profit to increase 75-85% when we release our results in February and we are on track deliver another record profit for the full year.
First half FY21 guidance
Taking into account its performance so far, Shaver Shop is gearing up for a positive half-year results release in February. The board advised that net profit after tax will be in the range of $13.5 million to $14 million. Previously, the company reported $7.6 million in net profit after tax for the first half of FY20.
