SUL +15.05%: Delivered a solid earnings beat in a reporting season that has been particularly unforgiving for consumer-facing stocks. Comparable sales during the first seven weeks of FY27 was strong, and shows trading hasn’t fallen off a cliff despite the difficult consumer backdrop.
Key results:
- Revenue of A$4.20bn, up 3.2% vs. $4.19bn expected.
- Net profit (NPAT) of A$205.9m, ~9% ahead of A$189.4m expected.
- Final dividend of 33cps.
- FY27 comparable sales are +1.5% through the first seven weeks.
- FY27 capex guidance of A$160m, with 18 net new stores planned.
Rebel was the standout, with second-half EBIT ahead of expectations. Supercheap Auto has also started FY27 positively, while BCF’s underlying momentum remains sound. Macpac is the weak link, with mild winter conditions continuing to weigh on Australian demand.
MM’s view: In the current retail environment, simply holding your ground is valuable – SUL did better than that. The portfolio of brands provides diversification that many discretionary retailers lack. We wouldn’t extrapolate the result into booming consumer conditions – housing weakness, interest rates and elevated living costs remain headwinds – but earnings expectations had become sufficiently cautious that a solid result and positive start to FY27 were enough to drive a significant re-rate. A good result, although after today’s move some of the easy money has clearly been made.
MM is cautiously bullish toward SUL
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