The Super Retail Group Ltd (ASX: SUL) share price is rallying higher after the company released a trading update for the first 16 weeks of FY22.
At the time of writing, the Super Retail share price is up 3.34% trading at $13.46.
How did Super Retail fare during this trading period?
COVID-19 lockdowns across key markets of New South Wales, Victoria, ACT and New Zealand have severely impacted trading, more so than the previous corresponding period.
Super Retail reported year to date like-for-like sales declines across the board for the first 16 weeks for FY22, with Supercheap Auto sales sinking 13%, Rebel Sports falling 10%, BCF down 12% and Macpac down 10%.
Overall group sales declined 12%.
The company advised that excluding the major impacted markets of New South Wales and Victoria, group like-for-like sales in the first 16 weeks of FY22 was 6% lower than FY21 and 27% higher than FY20.
Online sales channel performance was encouraging, increasing 96% and representing 30% of overall group sales, year-to-date.
Click and collect sales also grew by 163%, outpacing home delivery and representing 59% of overall online sales.
So far in FY22, the company has maintained gross margin improvements achieved in FY21.
However, the trading update warned that ongoing freight and logistics costs associated with elevated levels of inventory could weigh on future gross margins.
Looking ahead, management said it was confident about the key cyber and Christmas trading period, with a "fortified inventory position across all four of its core brands".
Management reiterated that the group was undertaking significant investment in its customer loyalty and data and analytics capability. The multi-year program is expected to have an impact on operating expenses in the first half and beyond.
Management commentary
Super Retail Group managing director and CEO Anthony Heraghty commented on the results, saying:
In FY22 year to date, we have maintained steady trading momentum in non-COVID impacted regions and we are confident that we will see a rebound in sales as lockdowns end and stores re-open.
As COVID-19 restrictions ease, we are looking forward to helping our customers celebrate by providing them with all of the products they need to resume travelling, playing sport and enjoying the great outdoors.
The group has a strong inventory position and is well placed to take advantage of the expected uplift in consumer demand in the auto, leisure and outdoor categories over the summer holiday period.
Super Retail share price snapshot
The Super Retail share price has been a solid performer so far in 2021, up 27.8% year-to-date.
Today's lift puts it within arm's reach of August all-time highs of $13.73.
