Super Retail Group (SUL) Report Interpretation

Overview

This earnings review assesses Super Retail Group’s FY26 result and early FY27 trading. Goldman Sachs highlights a Rebel-driven profit beat and stronger-than-expected SCA sales, while noting softer performance at Macpac and remaining risks from promotional competition, operating leverage and online or international competitors.

Core views

Goldman Sachs says Super Retail Group reported FY26 profit before tax 7% above its estimate, with the 2H26 result 18% ahead. The main driver was Rebel: its 2H26 PBT beat Goldman Sachs estimates by 34%, on sales 3.4% above expectations. Licensed apparel demand associated with the World Cup supported sales. The report also points to a sharp improvement in Rebel’s gross-margin trajectory: FY26 gross margin rose 60bp, compared with a 40bp decline in 1H26, implying an estimated roughly 170bp increase in 2H26. Goldman Sachs attributes this recovery to lower promotional activity, a more favorable product mix and stabilising stock-loss levels. The group’s first seven weeks of FY27 trading were broadly in line, with like-for-like sales up 1.5%. The underlying mix was uneven but constructive in the report’s view. SCA delivered 4.0% like-for-like growth, well above the 1.6% first-half FY27 Visible Alpha consensus expectation. Rebel grew 1.1%, modestly below the 1.6% consensus benchmark; BCF was in line at 0.4%; and Macpac declined 8.9% against expectations for 1.6% growth, which Goldman Sachs attributes to milder winter weather. The group also flagged a negative impact from the fuel crisis in 4Q26; this had stabilised in early FY27, though risks remained. For FY27 investment and expansion plans, management guided to A$160m of capex, broadly in line with A$156m consensus. The spending includes store development and Project Ignite, which is mainly technology- and systems-based. Planned net store openings are 18 versus consensus for 20: SCA eight, Rebel five versus six expected, BCF four, and Macpac one versus two. Group and unallocated costs are guided at A$60m, close to A$61m consensus, comprising A$30m of ongoing corporate costs and A$30m related to Project Ignite. Goldman Sachs retains a Buy rating and expects a positive share-price reaction to the earnings beat and SCA update. Its 12-month A$15.60 target price is derived equally from a weighted EV/EBIT SOTP valuation and a 10-year DCF. The SOTP applies FY26E EV/EBIT multiples of 10x for SCA and 9x for BCF, Macpac and Rebel, with reference to industry peers. The DCF uses a 9.9% WACC and 3% terminal growth rate. At the reported A$12.56 share price as of the 19 August 2026 close, the target implies 24.2% upside.

Analysis framework

Goldman Sachs compares FY26 segment sales, profit and margins with its own estimates and Visible Alpha consensus, then uses the early FY27 like-for-like sales update to assess momentum across SCA, Rebel, BCF and Macpac. It evaluates planned capex, store openings and central costs against consensus, and values the group using an equal blend of segment-based EV/EBIT multiples and a 10-year discounted cash flow model.

Methodology notes

• Valuation methodsSOTP (Sum-of-the-Parts) Valuation

  Weighted EV/EBIT sum-of-the-parts valuation

  The report values SCA at 10x FY26E EV/EBIT and BCF, Macpac and Rebel at 9x, using industry peers as references, then combines the segment values.

• Valuation methodsDCF (Discounted Cash Flow)

  10-year discounted cash flow valuation

  The report discounts projected cash flows using a 9.9% WACC and a 3% terminal growth rate, then gives this valuation a 50% weight in the target price.

• Industry AnalysisVolume-price decomposition

  Sales and gross-margin analysis by retail segment

  The report links Rebel’s profit outperformance to sales, promotional intensity, product mix and stock-loss trends, separating revenue momentum from margin effects.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Super Retail Group (SUL.AX)

  Primary covered company; Goldman Sachs rates the stock Buy following a Rebel-led earnings beat and strong SCA trading.

  Strengths

  FY26 and 2H26 PBT exceeded Goldman Sachs estimates; Rebel margin recovery and SCA’s 4.0% early-FY27 LFL growth.

  Weaknesses

  Macpac’s early-FY27 LFL sales fell 8.9%, while Rebel’s 1.1% LFL growth was modestly below consensus.

  Comparison

  The target valuation uses 10x FY26E EV/EBIT for SCA and 9x for BCF, Macpac and Rebel, with reference to industry peers.

  Risks

  Higher promotional intensity, operating deleverage, and online and international competition could weigh on sales growth and margins.

Key data

• FY26 PBT versus Goldman Sachs estimate+7%FY26 result was ahead of Goldman Sachs expectations.
• 2H26 PBT versus Goldman Sachs estimate+18%Group second-half PBT beat.
• Rebel 2H26 PBT versus Goldman Sachs estimate+34%Driven by a 3.4% sales beat and stronger margins.
• Rebel implied 2H26 gross-margin change~+170bpVersus -40bp in 1H26; supported by lower promotions, mix and stabilising theft.
• FY27 first 7 weeks group LFL sales+1.5%Overall trading update was in line.
• SCA first 7 weeks LFL sales+4.0%Versus 1.6% first-half FY27 Visible Alpha consensus.
• Macpac first 7 weeks LFL sales-8.9%Versus 1.6% consensus, attributed to milder winter weather.
• FY27 capexA$160mVersus A$156m consensus; includes store development and Project Ignite.
• FY27 net new stores18Versus consensus for 20.
• 12-month target priceA$15.60Based 50/50 on SOTP and 10-year DCF.

Impact & implications

Goldman Sachs views the Rebel earnings beat and SCA sales momentum as supportive of a positive near-term market reaction. The report’s valuation remains underpinned by segment-level earnings potential, while softer Macpac trading, fuel-crisis effects and a slightly lower store-opening plan temper the operating picture.

Risks

• Increased promotional intensity could pressure margins.
• Operating deleverage could weaken profitability.
• Online and international competition could continue to weigh on sales growth and margins.
• The fuel crisis negatively affected 4Q26 and remained a risk despite stabilising in early FY27.

What to watch

• Like-for-like sales progression across SCA, Rebel, BCF and Macpac after the first seven weeks of FY27.
• Whether Rebel sustains improved promotional discipline, product mix and gross-margin recovery.
• The persistence of fuel-crisis effects in FY27.
• Delivery of A$160m FY27 capex, Project Ignite spending and the planned 18 net new store openings.