SUL +0.67%: A volatile session for SUL, mirroring the performance of JB Hi Fi (JBH) yesterday with the shares sold off early, down around 6% at the lows before finishing up on the day following the release of a trading update as part of the Macquarie Conference.
- Retail like-for-like sales growth in the 2H to date of 3.1% which is an improvement relative to 1H (1.8%), driven by ongoing positive momentum at BCF.
- Gross margins however are tracking lower, broadly consistent with the year-on-year decline in the 1H.
- Auto was flat relative the 1H, Rebal saw growth accelerate, BCF was a standout, while Macpac struggled with a larger exposure in NZ weighing.
- They also guided to higher costs on some project work.
Sales growth has improved from a soft 1H with the majority of brands doing pretty well. We shouldn’t see much in the way of earnings changes stemming from the update.
MM remains long & mildly bullish SUL
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