Super Retail Group is pumping more money into beefing up its online capabilities as the retailing collective prepares to better tackle the rising tide of digital-only sales.
In a trading update ahead of its annual general meeting on Wednesday, Super Retail said online sales had grown 132 per cent across its four brands for the first quarter of the 2021 financial year. Super Retail operates Supercheap Auto, Rebel Sport, BCF and Macpac.
As a result, the company told investors it now expects its capital expenditure for the year to be $100 million, with much of it focused on increasing online capabilities.
“The dynamic growth we have seen in our digital sales, through both click & collect and home delivery, has reinforced our conviction in our omni-retail business strategy,” chief executive Anthony Heraghty said.
“We will continue to re-invest in the business to enhance our digital capability and increase our market share.”
Super Retail’s shares ended the session 4.7 per cent to $11.69 following the update.
Online retail has boomed across the sector in light of the COVID-19 pandemic. Digital sales at each of Super Retail’s brands have more than doubled since the end of June.
Total sales, which include in-store, rose 25 per cent across the group for the same period despite 94 stores being closed through Melbourne’s second lockdown. Sales were positive across all brands bar Macpac, which fell 2 per cent due to being “heavily impacted” by the lockdown.
While the company did not provide any update on its earnings, Mr Heraghty said a 2 per cent jump in gross margins, thanks to a reduction in discounting, had boosted Super Retail’s bottom line.
“Our considered approach to promotional activity in response to strong levels of consumer demand – to help manage inventory in the leadup to Christmas and optimise gross margin – and the substantial fixed component of our cost base means that revenue growth has flowed meaningfully through to the bottom line,” he said.
Despite the bullish trading update, the company only narrowly avoided a ‘first strike’ against its remuneration report at Wednesday’s AGM. A total of 17.18 per cent of investors voted against the report, just shy of the 25 per cent required.
Proxy firm ISS had advised its clients to vote against the report due to excessive short-term bonuses it awarded to Mr Heraghty, especially considering Super Retail’s $6.5 million claimed in JobKeeper. It also took issue with the lack of specific hurdles required for the awarding of bonuses.
Investors also protested the awarding of 239,440 performance rights to Mr Heraghty, with 20.9 per cent voting against the proposal. ISS labelled the grant as “discretionary and less-than-rigorous” and questioned its grant price of just $7.19.
Source: Thanks smh.com