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Gains of 12% have propelled SuperGroup (SGP) shares to the top of the pile this morning as investors welcome a robust Q4 trading statement that beat broker expectations and counters a gloomy UK retail backdrop. FY revenues +21% coupled with expectations for gross margin enhancement at the top end of guidance and a strong pipeline of new store openings is music to shareholders’ ears. So too is 30% sales growth in the typically low volume Q4 and an acceleration in same-store growth to 15% as internet sales help within a challenging retail environment and versus strong comparables.
All this has helped SGP shares break sharply higher from recent 10-month support 1200p and back above a key 6yr intersecting trendline to test the 200-day MA 1450p and trade levels last seen in early April. Overcoming the 2016 trend of falling highs is also a positive, especially if said trend line can turn supportive and help the shares back towards 2yr highs around 1700p. Even news of a co-founder’s semi-departure (still contributing to design lab) is being overlooked with investors evidently confident that brand consistency will not be at risk of unravelling like a loose thread from a hitherto solid seam.
Mike van Dulken, Head of Research, 12 May
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