REH +5.97%: traded higher today after delivering a first-quarter result that was better than the market had been braced for. That is important given both Citi and Jarden downgraded the stock last week on expectations REH would underwhelm, which has not happened.
Key Q1 highlights:
- Sales: A$2.51bn, up 4.3% YoY.
- On an annualised basis, sales are running around 1–2% ahead of consensus.
- ANZ sales: up 12.8%, driven by stronger volumes and a mid-single-digit contribution from inflation.
- US sales: up 5.6%, supported by network expansion and low-single-digit inflation.
The standout was ANZ, where momentum remains strong and volumes are clearly holding up better than feared. The US remains the softer part of the business, with management still describing conditions as challenging despite reasonable top-line growth.
Management expects a strong first half in ANZ but remains cautious on the second half of FY27, which is the main reason not to get carried away with today’s rally.
Overall, a better-than-feared update and goes some way to pushing back against last week’s broker downgrades. ANZ is performing well and the US is not deteriorating as badly as some had expected. The key question now is whether that resilience can hold through the second half, but today’s result suggests expectations had become too pessimistic.
MM remains long & bullish REH ~$18
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