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Rebel’s loyalty restructure impacts half-year profit

Australian sporting retailer Rebel has recorded a dip in profit before tax (PBT) for the first half of FY24 compared to the same period last year.

The retailer accrued PBT of around $64-65 million for H1 FY24, which is around $18-19 million below last year’s half-year PBT result of $84 million.

Super Retail Group CEO and MD Anthony Heraghty said Rebel’s first-half normalised PBT result was partly impacted by Rebel’s newly launched loyalty program in late 2023.

“Following the successful launch of Rebel’s new customer loyalty program in October 2023, more than 40 per cent of rebel’s 3.9 million active club members have already earned points by shopping at Rebel,” Heraghty said.

“Rebel’s first half normalised PBT result includes the impact of a provision for deferred revenue as a result of loyalty credits issued to customers under this program. 

“The amount of the provision is expected to be approximately $5 million in H1 FY24 and approximately $8 million in total for the full year FY24, in line with previous disclosure.”

Rebel was also the only brand in the Super Retail Group portfolio – which also includes Macpac, Supercheap Auto and BCF – to report negative growth in sales. Rebel’s first half sales growth for the first 26 weeks of FY24 compared to the same time last year was negative 1%, with like-for-like sales in the same period down 3%.

Macpac recorded 4% growth in first half sales, with a flatline on like-for-like sales. 

Overall, Super Retail Group expects first half revenue to hit $2 billion, with first half PBT projected to hit between $200 million and $203 million. This is a preliminary result and remains subject to audit review and finalisation.

“The Group has traded well over the cyber sales and Christmas holiday trading period,” Hraghty said. “We maintained positive like-for-like sales growth in the first half, however cost of living pressures on the consumer did lead to a more constrained retail trading environment at the end of the second quarter. 

“Despite this, our customer proposition and the resilience of the lifestyle and leisure categories in which we operate underpin our performance in challenging economic conditions where consumers are sharpening their focus on value.” 

Heraghty said that gross margin, as a percentage, is expected to be higher in H1 FY24 compared to the same time last year. However, he added that cost of doing business (CODB) as a percentage of sales has increased as a result of wage inflation, rent and electricity. 

“Higher CODB has impacted rebel in particular, given the composition of its lease portfolio and its higher team member-to-store ratio,” Heraghty said.

Super Retail Group had no drawn bank debt and a positive cash balance at the end of the first half. 

“I would like to take this opportunity thank all of our 15,000 team members who have contributed to this outcome through their passion and dedication to providing excellent service to our customers. 

“I look forward to providing further details on our first half performance at our half year results presentation in February.”

This article was originally published on Ragtrader on 15th January 2024. View original.

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