Super Retail Group Ltd (ASX: SUL) shares jumped 9.3% higher to $15.38 on Thursday afternoon.
The ASX retailer reported record half-year sales of $2.2 billion, but profits are feeling the squeeze.
Over the past year, Super Retail Group shares have climbed 6%. They're still lagging the S&P/ASX 200 Index (ASX: XJO), which has gained 11% over the same period.
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Cautious consumer backdrop
The retailer delivered record first half-year 2026 sales of roughly $2.2 billion. This was a 4.2% increase on the prior year, with like-for-like growth in positive territory.
Across Supercheap Auto, Rebel, BCF, and Macpac, customers kept spending despite a cautious consumer backdrop. Online sales and club member engagement continued to rise. Membership climbed by 8% to 13 million members, and this reinforced the strength of its omni-channel model and sticky loyalty ecosystem.
Super Retail Group Managing Director and CEO Paul Bradshaw was pleased with the results:
Super Retail Group delivered first half sales growth of four per cent—a solid outcome considering the competitive retail environment and challenging conditions, notably for rebel and BCF, during the period. We were pleased with the continued momentum from Supercheap Auto, delivering steady growth, market share gains in its core auto category, and benefiting in market from the new Spend & Get loyalty program… I would like to acknowledge the dedication and contribution of our 16,000 team members, whose efforts have been central to delivering this result.
Net profit squeezed
But this wasn't a clean beat-and-raise result. Net profit after tax slipped 6.8% to $121.9 million as operating costs climbed. Investment in a new distribution centre, systems upgrades, and higher wage and rent expenses chewed into margins.
Promotional intensity across the retail sector also kept gross margin expansion in check. Revenue momentum was strong. Earnings leverage, less so.
Super Retail Group reshaped its footprint, opening 16 new stores and closing 10 as it fine-tunes the network. At the same time, it continues to invest in omni-channel capabilities and is rolling out a new national distribution centre in Truganina. That's a move that should unlock meaningful efficiency gains.
The balance sheet remains a clear strength, with no drawn bank debt and $108 million in cash, providing management with ample flexibility.
Investors focus on positives
The market, however, chose optimism. Investors appeared to focus on the top-line growth, resilient cash generation, and a healthy balance sheet. A solid, fully-franked dividend helped seal the deal. The message from traders was clear: this is a business investing through the cycle, not retrenching.
That context matters. Over the past few years, Super Retail has navigated pandemic distortions, supply chain disruption, surging freight costs, and now a cost-of-living squeeze that has pressured discretionary spending.
Margins have ebbed and flowed. Promotional competition has intensified. Yet the group has consistently grown sales and expanded its store footprint.
What next for Super Retail Group shares?
The ASX retail business isn't standing still.
Super Retail Group plans to open 12 new stores in the second half of FY26 while pushing ahead with major projects, including a new distribution centre and upgraded HR and payroll systems.
Trading has also started strongly. Over the first eight weeks of the half, like-for-like sales lifted 3.5% and total sales jumped 5% — a solid sign that demand remains resilient.
Management has locked in $155 million in FY26 capex to target store network expansion and digital investment. With a strong balance sheet behind it, the company believes it has the firepower to invest in growth while handling tough competitive conditions.
