Super Retail Group’s BFC splutters on fuel cost and supply crisis

Shares in the ASX-listed company behind big-box retailers BCF, Rebel and Supercheap Auto were hammered after it reported a soft trading update as consumers batten down the hatches.

Super Retail Group, which also owns Macpac, said sales at its BCF stores had been hit the hardest following the onset of war in the Middle East.

It said higher prices at the pump and fuel supply constraints, particularly in regional areas, curtailed outdoor pursuits over the key Easter and school holiday trading period.

“This dynamic was compounded by an unfavourable calendar arising from the separation of Easter and Anzac Day, with the overall impact broad-based across all regions and categories,” SRG said on Thursday.

Comparable sales at BFC have so far plunged 3.3 per cent in the second half of the financial year, compared to a year earlier, with current full-year sales off 0.3 per cent.

SRG’s Supercheap Auto business was the standout performer among the group’s portfolio. Comparable sales jumped 1.6 per cent in the second half, and are up 4.3 per cent for the full financial year to date. But it did note sales momentum waned after the outbreak of the US-Israel and Iranian war in March.

The impact was most evident in discretionary categories such as power tools, which had been partially offset by increased demand in fuel-related and DIY categories including maintenance, braking and trailer components.

Rebel also held up against the backdrop of household belt-tightening after the Reserve Bank lifted interest rates in February and March.

Sport and exercise continued to underpin demand, with men’s wear, recovery gear and football performing well. But demand for higher-value sporting equipment was subdued, and performance footwear growth moderated amid increased competition.

Overall, group comparable sales were up just 0.4 per cent for the second half but were 3.3 per cent higher for the year to date. On the positive side, its gross margin remain only “modestly” below the prior corresponding period.

SRG’s share price plunged 14 per cent in early trade before recovering to be down 3.2 per cent to $11.28 at 10.40am.

“Sales momentum across all four brands was adversely affected by the onset of the Middle East conflict,” SRG said

“Inflationary pressures, including higher fuel prices and rising interest rates, together with concerns around fuel availability weighed on consumer sentiment, with the impact most pronounced over the key Easter trading period.

The company sad it had invested $30 million in additional working capital to secure inventory ahead of pending war-fuelled price increases, most notably in the Supercheap Auto business.