SuperGroup full year results: what the analysts have to say

“SuperGroup remains a paragon of managed international growth, benefiting from substantial risk diversification in terms of geographies, channels and product categories. The phased introduction of new systems and products into new distribution centres also reduces commercial and shareholder risk, even if incurring a small degree of double-running costs.

“It also benefits from a high degree of natural hedging, which is complemented by one of the longer (out to 18 months) FX hedging policies in the sector. Provided currencies move proportionately to each other, management believes the gross margin outlook is protected, as reflected in its FY17 guidance above.” - David Jeary, analyst, Canaccord Genuity

“Full year results are a good reflection of an innovating, increasingly well-run business, with strong top line growth, significant infrastructure improvement and good cash generation.

“In addition to the first FY dividend, the business will also pay a special dividend of 20.0p. Guidance should also reassure, with management forecasting gross margin accretion, despite FX pressures, and cost growth broadly in line with sales. We expect little change to consensus forecasts. We think the business will continue to benefit from a strong pace of innovation (product and store environment) and improving management and infrastructure but that this is reflected in the relatively high valuation.” – James Collins, retail analyst, Stifel

“SuperGroup is making good strategic progress in building a global lifestyle brand, with a surprise special DPS announced. Good momentum seen across all channels, helped by product innovation and business process improvements, which should benefit FY17 and beyond.Recent FX moves are not expected to be an issue given a diverse global model. Good momentum seen across all channels, benefiting from product innovation, increasing newness and process improvements.” - Kate Calvert, retail analyst, Investec

“We recently cut SuperGroup’s 2018 EPS by 14% in response to the fall in sterling following the referendum vote. The company retains strong growth prospects, which we believe offer flexibility to manage margins, and have seen this with the improved leverage in the past year. Growing sales volumes driven by new space, even if LFL sales growth were to slow, keeps SuperGroup on the front foot in negotiations with suppliers. On this basis we consider our recent adjustments to be worst case. The shares are currently trading c20% below their pre-Brexit peak and are oversold, in our view.” – Tom Gadsby, analyst, Liberum

“There are, we believe, enough initiatives in the pipeline to drive strong earnings growth over the medium term including the strengthening of the ranges particularly with the launch of new categories and the development of womenswear, the fastest growing category in FY16. At the same time, trading in the UK is relatively robust, while there continues to be significant opportunities to develop the brand in Europe and the US, where results should just about break-even in the current year.” – Freddie George, retail analyst, Cantor Fitzgerald