Key Highlights

• Segment EBITDA rose 2.1% to A$774 million, while segment EBIT fell 2.7% to A$389 million and segment profit before tax fell 7% to A$306 million.

• Gross Margin improved by 10 basis points to 45.7%, helped by Rebel and BCF, while it eased at Supercheap Auto and Macpac.

• Brand sales in FY26 were: Supercheap Auto up 3.9%, Rebel up 4.5%, BCF up 0.2% and Macpac up 3.5%, with new stores contributing at each brand.

• Supercheap Auto rose 5.3%, Rebel 2.8%, BCF 5.5%, and Macpac fell 10.2%, which the company attributed to mild winter weather during peak trading.

What happens to a retailer's profit when sales reach a record but costs grow faster? Super Retail Group (ASX:SUL), owner of Supercheap Auto, Rebel, BCF and Macpac, answered that on 20 August 2026. Group sales for the year to 27 June 2026 rose 3.2% to A$4.2 billion, a record, but normalised net profit after tax fell 2.8% to A$226 million, and statutory profit fell 7.2% to A$206 million. A trading update then showed sales up 3.5% in the first seven weeks of FY27.

The FY26 numbers

Segment EBITDA rose 2.1% to A$774 million, while segment EBIT fell 2.7% to A$389 million and segment profit before tax fell 7% to A$306 million. Statutory Earnings Per Share were 91.2 cents and normalised EPS was 100 cents. The final Dividend was 33 cents per share, fully franked, taking full-year Ordinary Dividends to 65 cents. One report put net Debt at A$14 million, which it described as a conservative balance sheet.

Online sales rose 5.3% to A$552 million, or 13.1% of group sales, up from 12.9%. CEO Paul Bradshaw described the year as an encouraging result achieving record sales in the face of significant headwinds.

Why profit fell as sales grew

Gross margin improved by 10 basis points to 45.7%, helped by Rebel and BCF, while it eased at Supercheap Auto and Macpac. Normalised cost of doing Business rose 5.6%, lifting it by 90 basis points as a share of sales. Drivers included network expansion, wage and occupancy inflation, a new HR and Payroll system and the move to the Truganina distribution centre. Higher financing costs and project Investment weighed on net profit.

This shows Operating Leverage working in reverse. Sales growth of 3.2% against cost growth of 5.6% leaves less profit, which is why management's cost programme, Project Ignite, is central to the FY27 story.

The four brands

Brand sales in FY26 were: Supercheap Auto up 3.9%, Rebel up 4.5%, BCF up 0.2% and Macpac up 3.5%, with new stores contributing at each brand. Rebel, the sports retailer, was the fastest growing. Supercheap Auto serves a relatively defensive automotive aftermarket, BCF depends on boating, camping and fishing, which are discretionary, and Macpac is exposed to weather and outdoor spending.

FY27 trading update

In the first seven weeks of FY27, group sales rose 3.5%. Supercheap Auto rose 5.3%, Rebel 2.8%, BCF 5.5%, and Macpac fell 10.2%, which the company attributed to mild winter weather during peak trading. Management flagged uncertainty from wider economic conditions. Seven weeks is a short sample and does not account for key trading periods such as Christmas, so it should not be extrapolated.

Strategy

Management launched a five-year plan focused on growth and transformation, with more technology investment, store network expansion and the continuing Project Ignite programme. The group expects a net 18 new stores in FY27. Store growth lifts sales but also raises costs, so the benefit depends on new stores reaching Maturity and on whether technology investment improves productivity.

Competitive position

Super Retail competes with Bunnings and Repco in auto and outdoor categories, with JD Sports and Amart in sport, and with online retailers and department stores. Its advantages are encouraging brands, a national store network and a loyalty membership base, which supports data-driven marketing. The retail sector faces cost Inflation and cautious consumers, and promotional intensity remains high.

Reading the cost pressures

The cost of doing business rose by 90 basis points as a share of sales, from the factors named above. Some of those costs, such as the Truganina distribution centre move and the new HR and payroll system, are projects that should not recur, while wage and occupancy inflation are structural. Management's challenge is to hold costs down so that sales growth of around 3% converts into profit growth. A net debt level of A$14 million remains small relative to segment EBITDA of A$774 million, which suggests limited Balance Sheet risk.

Risks and what to monitor

Items to watch include the annual general meeting, the half-year result expected around February 2027 on the usual timetable though unconfirmed, trading during the key Christmas period, the cost of doing business ratio, gross margin trends and any update on Project Ignite benefits. Readers should also compare the seven-week trading update with later updates, because seasonal factors such as weather and promotional timing can distort short periods, and should check whether Project Ignite benefits are quantified in future announcements. Investors can also watch whether Macpac recovers once winter weather normalises, since its early decline was attributed to conditions rather than demand.