Super Retail Group Ltd (ASX: SUL) shares are under pressure on Thursday morning.
At the time of writing, the ASX 200 stock is down 13% to a 52-week low of $10.08.
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Why are Super Retail shares crashing?
Investors have been selling the retailer's shares this morning following the release of a trading update after the market close on Wednesday.
Investors appear to be reacting to softer trading momentum across the group and a lift in expected corporate costs.
According to the update, group like-for-like sales growth was just 0.4% for the first 18 weeks of the second half. Total sales growth for the same period was 1.9%.
Management revealed that sales momentum across all four brands was impacted by the onset of the Middle East conflict, with inflationary pressures, higher fuel prices, rising interest rates, and concerns around fuel availability weighing on consumer sentiment.
The impact was most pronounced over the key Easter trading period.
BCF hit hardest
The weakest performer in the second half has been the BCF brand, which reported a 3.3% decline in like-for-like sales for the half to date.
Management said BCF was the brand most affected by elevated fuel prices and fuel supply constraints, particularly in regional areas.
This reduced customer participation in outdoor activities during the Easter and school holiday period.
The ASX 200 stock also noted that trading was hurt by the unfavourable calendar caused by the separation of Easter and Anzac Day.
Mixed performance across other brands
Supercheap Auto delivered like-for-like sales growth of 1.6% for the second half to date, but management noted that trading conditions in the auto category moderated through March and April.
Discretionary categories such as power tools were weaker, though this was partly offset by increased demand in fuel-related and DIY categories.
The Rebel brand posted 1.4% like-for-like sales growth and gained market share despite weaker category sales through March and April.
Finally, Macpac recorded 2.5% like-for-like growth, but its momentum was also affected by reduced outdoor activity in March and April as it prepared for the key winter trading period.
Margins and costs
Also weighing on the ASX 200 stock on Thursday is news of margin pressure.
Super Retail advised that group gross margin for the second half to date is modestly below the prior comparable period.
In addition, total group and unallocated costs for FY 2026 are now expected to be $66 million, up from the previous estimate of $60 million.
This includes project costs related to the transition to a new Victorian distribution centre and implementation of a new HR Core and Payroll system.
