Super Retail Group Ltd's stock plummeted 9.95% during intraday trading, reflecting investor concerns following the company's latest trading update.
The sharp decline comes after the company confirmed that interest-rate hikes and elevated fuel prices are starting to impact consumer demand. Like-for-like sales in the last 10 weeks appear negative across most of Super Retail's brands, with only its sports chain rebel showing resilience.
Analysts at Jefferies highlighted that Super Retail's gross margin is under significant pressure, which may intensify as input costs rise and potential discounts are needed to stimulate demand. The firm also noted elevated cost-of-doing-business inflation due to CPI impacts on wages and rent, making operating deleverage difficult to avoid. In response to these challenges, Jefferies lowered its price target for Super Retail by 25% to A$12.00 per share.