Super Retail Group’s May 2026 trading update shows a meaningful slowdown in sales, particularly in BCF and Supercheap Auto. These two businesses are more directly impacted by the spike in petrol and diesel prices. We expect soft sales trends to persist into FY27e, but also see gross margin gains from a stronger Australian dollar, self-help in Rebel and distribution centre benefits flowing through to earnings. We expect to hear more on these topics at Super Retail Group’s strategy day on 11 June 2026.

Super Retail Group has earnings upside in Rebel and from its new Victorian distribution centre. The addition of a currency tailwind for cost of goods in FY27e supports solid EPS growth. We estimate a 10% lift in the Australian dollar could be a $30 million, or 8% EBIT benefit. It is a 71bp boost to gross margins. While there is some uncertainty given changeover of CEO and a new three-year strategy plan coming, we expect the plan to have few surprises.

Super Retail Group reported 1H25 sales up 4%, but EBIT down 7%. The typically resilient Supercheap Auto division had a 6% decline in EBIT. The increasingly competitive sales backdrop for Auto makes it challenging to see much earnings recovery over the next 18 months. Elevated competition will continue to be a headwind in Supercheap Auto and we expect flat like-for-like sales for 2H25e and FY26e. Elsewhere, sales trends are improving and mid single-digit sales growth is likely for Rebel, BCF and Macpac in 2H25e.