The Super Retail Group Ltd (ASX: SUL) share price has been a strong performer in morning trade on Tuesday.
At time of writing, the retail conglomerate's shares are up 5% to $12.20.
Why is the Super Retail share price surging higher?
Investors have been buying the company's shares following the release of a trading update ahead of its appearance at the Macquarie Group Ltd (ASX: MQG) Australia Conference 2021.
According to the release, Super Retail's strong form has continued since the end of the first half.
For the first 44 weeks of FY 2021, Super Retail delivered group like-for-like sales growth of 28%. This is an increase on the like-for-like sales growth rate of 24% that it achieved during the first half and was driven by growth across the business.
The release explains that like-for-like sales are up 21% for Supercheap Auto, 20% for Rebel, 59% for BCF, and 17% for Macpac.
Strong margins continue
Super Retail's Managing Director and CEO, Anthony Heraghty, was very pleased with the company's second half performance and notes that its margin improvements have been maintained. This is also likely to have given the Super Retail share price a boost today.
He said: "I am pleased to report that the Group has delivered strong Easter trading across all brands, particularly BCF and Macpac. Given the continued strength of customer demand, the Group has maintained relatively subdued levels of promotional activity in the second half. As a result, the gross margin improvement which the Group delivered in the first half has been maintained in the second half."
"The Group is in a well-stocked inventory position, which has benefitted from the arrival of orders made in the first half. Higher shipping costs in the second half have impacted inventory costs but these have been partly offset by favourable currency movements."
"As previously advised, second half operating expenses will reflect catch-up on projects deferred during COVID-19 and increased reinvestment in the business. Given the impact of COVID-19 on FY20 sales, the Group will now report FY21 like-for-like sales against both FY20 and FY19 trading, to enable a comparison with non-COVID trading conditions," he concluded.
The Super Retail share price is now up over 100% since this time last year.
