Welcome to the fiscal year 2026 half year results presentation for Super Retail Group. Today's presentation will be made by the group's Chief Executive Officer and Managing Director, Mr. Paul Bradshaw, and its Chief Financial Officer, Mr. David Burns. There will be an opportunity to ask questions at the end of the presentation. This call is for investors only. Media wishing to obtain access to management should contact Katie Perini, GM Corporate Affairs, whose contact details appear on today's ASX announcement. I would now like to hand over to Mr. Paul Bradshaw to begin today's presentation.
Thank you, David, good morning and welcome everybody to the Super Retail Group FY 26 half year results presentation. It is both a pleasure and a privilege to present my first results as CEO this morning. Since taking on the role on the 1st of November, I've spent much of my time of those 100 days listening. That's listening to our shareholders, listening to our team, to our trade partners, and importantly, to our customers. It's been a genuinely energizing experience, highlighting the passion of our team, and I'd just like to reflect and say a big thank you for the commitment, the hard work, and effort that all of our team members have put into the first half. We have a clear strategic opportunity ahead of us. We are wasting no time in putting the plans in place to realize that potential.
First things first, though, I will begin this morning by speaking to some of our financial and operating highlights for the first half of FY 2026, before discussing the performances of each of the brands. Our Chief Financial Officer, David Burns, will provide you with some more detail on the financial results. I will provide a trading update for the second half. There will be an opportunity for you to ask questions at the end of the call. Moving to slide three, the full year highlights. We are pleased to be able to provide positive like-for-like growth in what was an increasingly competitive retail environment in the first half of FY 2026. Together, with ongoing contribution from network expansion, the group delivered a further 4% growth on last year's record base.
Supercheap Auto was able to sustain their positive momentum from the end of FY 2025. Macpac delivered a standout year with strong revenue growth and even stronger profit growth. We continued to gain market share in key categories over the six-month period. Supercheap Auto gained share in the core auto category. Rebel continued to gain share in sport. Macpac gained further share in the adventure category. We were particularly pleased with the progress during the period of our team member safety scores, with targeted initiatives delivered a 22% improvement in the Total Recordable Injury Frequency Rate. The investments in our network and loyalty programs continue to yield positive responses from our customers. During the year, we saw continued growth in our active club members, customer Net Promoter Scores, and club member percentages of total sales for all four of our brands.
We are making good progress with our new DC in Victoria. We have now completed testing of the automation facilities, and we are on track for a phased migration of all our brands through this calendar year. Moving to slide four, the financial and operating highlights. The group delivered another year of record sales, with revenue up by 4.2% to AUD 2.2 billion, driven by 2.5% like-for-like growth and supported by continued network expansion. Gross margin declined by 20 basis points over the full year to 45.4%. Normalized profit before tax declined by 6.9% to AUD 173 million, representing a PBT margin of 7.9%. That was down 90 basis points from the prior year. A normalized MPAT was AUD 122 million.
Details of the items not included in normalized MPAT are set out in the segment notes in the appendix and includes costs associated with team member wage remediation, as well as net legal and professional advisory fees, and other adjustments related to a number of regulatory and litigation matters. The board has determined to pay a fully franked interim dividend of AUD 0.32 per share in relation to the first half of FY26, which is in line with the prior year interim. The group enters the second half in a strong financial position. Strong cash conversion in the period has resulted in a net cash balance of AUD 107.8 million, with no drawn bank debt at period end. I'll take you to slide five, the first half sales.
I will make further comments on growth for each of the brands in the following slides, we'll take the opportunity to note here. Firstly, the group has delivered record half-year sales. Sales growth of 4.2% was driven by a 2.5% like-for-like growth and 1.7% from new store openings. Like-for-like sales was mixed with the portfolio, with a strong performance from Macpac. Solid results from rebel and Supercheap Auto, a disappointing outcome from BCF. Turning to Slide six, the operating PBT. Slide six outlines the drivers of the decline in profit before tax, both in absolute dollars as well as margin over the half year.
On the left-hand side, you can see the margin evolution expressed in terms of gross margin and cost of doing business, with the majority of the overall decline due to an increase in the cost of doing business as a percentage of our sales. In the waterfall chart on the right, we have presented the PBT drivers in terms of the operational outcomes. That is, PBT outcomes from the brands, including corporate costs and FY 2026 project outcomes, which are specific to the previously flagged project cost that will impact FY 2026 earnings. Operational outcomes contributed a net $1.3 million decline, or 0.7%, to group PBT in the half.
Solid, positive contributions from Supercheap Auto and Macpac during the period were offset by declines at rebel and BCF, with a modest improvement in the corporate costs, amounting to a net operational decline of approximately AUD 1 million in the half. I will discuss the individual drivers of performance in the brand reviews later in the presentation. Project outcomes contributed AUD 11.5 million to the overall PBT decline in the half. We have previously guided to two significant projects in FY 2026, which include the duplication costs associated with the new national distribution center in Victoria, and the implementation of the new human resource core and payroll system. The combined costs of those two projects is expected to be approximately AUD 29 million in FY 2026, with AUD 15 million realized in the first half.
The year-on-year increase in these project costs amounted to $11.5 million, and these projects are progressing well and planned through the second half of this financial year. I'll now take you to Slide seven, the customer highlights. Slide seven shows what we have added... That we've added a further 1 million active club members over the past 12 months, to now have 13 million members, representing almost 85% of our sales. Club member spend, as a percentage of our sales, has continued to increase across each of the four core brands. Across the group, our club members' NPS score has improved well, from a 71 to 74.
I would also note that the largest increase in club membership, and club member NPS was Supercheap Auto, following a concerted effort at improving customer engagement in a period of heightened competitor activity, whilst delivering the new Spend & Get customer loyalty program in the period. Turning to Slide eight. The store network highlights. We continue to deliver on a strong pipeline of store openings, with 16 new stores opened in the first half of 2026, and we plan to open a further 12 in the second half. I would note that the majority of the new store activity was concentrated in the rebel and Supercheap Auto in the period, with rebel also engaging in an elevated level of refurbishments and relocations. By contrast, BCF's network activity will be second half weighted in the financial year.
BCF added to their superstore fleet in the period with the highly successful opening of our Palmerston Superstore in Darwin in November. The opening of our first superstore issued in New South Wales at Taren Point is planned for the second half. I'll look forward to that store launch. Turning to Slide nine, digital and omni highlights. Full year online sales grew by 9% to AUD 312 million and represented 14% of our total sales. Importantly, Click & Collect, which is the most profitable channel, grew faster than home delivery within online and accounted for 48% of online sales, meaning that 93% of our sales are completed in a store. Our new distribution center will further enhance our capacity to meet those growing customer expectations for fast and reliable service.
Slides 11 and 12, group performance and segment performance. Slides 11 and 12 are self-explanatory, so I'll move straight to Supercheap Auto. Supercheap Auto delivered a solid performance in the first half, maintaining its momentum from the second half of the previous financial year. Importantly, the team was able to deliver top-line growth whilst maintaining gross margins, despite the still elevated promotional environment. After a challenging prior comparison period, it was also pleasing to see that Supercheap once again growing its market share of the core auto category. Underscoring the strength of the Supercheap market leading position, was a substantial increase in customer Net Promoter Score, which climbed from 68 in the prior comparison period to now 75, despite the heightened competitive activity in that category.
The team completed over 500,000 fitments across the network in the first half. That is an increase of 15% on the prior year. That's just solidifying a key point of differentiation, not only amongst the core auto peers, but in particular, to generalists operating in this space. A summary of the financial performance of Supercheap Auto is set out on slide 14. In particular, I'd like to make the following call-outs: Total sales grew by 5% to AUD 813 million. Like-for-like sales growth of 3.5%, with 3.7% in Australia and 2.1% in New Zealand. Despite the elevated competitive intensity, the gross margin was in line with the prior year. Cost of doing business was also well managed, remaining flat as a percentage of sales.
With full-year PBT margin was in line with the prior year at 12.6%. PBT increased by 4.5% to AUD 102 million in the half year. A solid half year from the team at Supercheap Auto. Now, turning to rebel. The rebel team delivered credible like-for-like growth in the period, in an environment which included heightened levels of promotional activity and challenges with inventory and availability. Despite these challenges, rebel continued to increase its market share, both online and offline, in the half. The team was highly active across the network, delivering seven new stores, six closures, and four refurbishments and relocations in the half, almost matching rebel's total network activity the prior year for the full year. While the top-line performance was solid, we believe we could have done better.
Over the past few years, the team have made really good progress in broadening the overall range. Footwear is just a good example where we've extended the offer, both in terms of brands and categories, to better meet our customer needs and drive engagement. During the half, and in particular over the peak trading period, we did not consistently have the right depth of inventory available on our key ranges and our key sizes to really fully capture the customer demand. This was driven partly by disruptions by some of our key suppliers and by our shortcomings in our own planning and execution. As a consequence, we believe we did leave sales on the table. The important point is that this is entirely within our control to address.
The actions required are well understood and are already underway, we are confident in our ability to improve our in-stock positions, and in turn, better convert demand into sales and sales into profits moving forward. A summary of rebel's financial performance is set out on slide 16. Total sales grew by 4.8% to AUD 740 million. Like-for-like sales grew by 3.8%, driven by growth in the number of transactions. The gross margin declined by 40 basis points, driven primarily by an increase in the promotional activity throughout this period, cost of doing business increased as a percentage of sales due to the increased property-related expenses, which includes those large new stores in the likes of Bondi Junction and Broadway, as well as the elevated level of network activity in the half.
Profit before tax declined by 11.4 to $53 million. Turning to BCF on slide 17. Total sales for BCF were in line with a record prior year. We said in August that BCF's strong FY 2025 results was assisted by favorable conditions at key times of the year, whilst we expected growth in FY 2026, it was always gonna be a challenge. We didn't anticipate the extent of disruption that would be posed by the extended algae bloom in South Australia and the disruption to those coastal conditions in Victoria, not seen for more than 20 years. Encouragingly, though, we saw growth in the northern states, here, WA, the Northern Territory, and Queensland.
However, those environmental factors had a strong negative impact on key categories such as fishing, marine, and water sports, particularly in South Australia and Victoria, resulting in a modest like-for-like decline over the half. BCF added 1 super store in the period of Palmerston in the Northern Territory, with early performance tracking very well indeed. A summary of the financial performance of BCF is set out on slide 18. In particular, I would call out the following: Total sales increased marginally to AUD 520 million. Like-for-like sales declined by 1.6%, driven by a reduction in the number of transactions, particularly in the marine, fishing, and water sports categories. Gross margins improved by 20 basis points. Growth in cost of doing business was well managed, however, increased as a % of sales, negatively impacted the PBT margin in the period.
Segment PBT decreased by 12.3% to AUD 39 million. BCF opened just one new store in the period, with the majority of its network activity weighted towards the second half, including that new super store in Taren Point in Sydney. Turning now to Macpac on slide 19. Macpac delivered a standout performance in the first half of the year. Record sales growth, driven by high single-digit like-for-like, and a strong contribution from new stores that we opened back in FY 2025. Macpac continues to gain market share and brand awareness in Australia as more and more customers experience our stores, our products, and our amazing team members. Pleasingly, the strong revenue performance translated into even stronger profit growth in the half. A summary of the financial performance of Macpac is set out on slide 25.
Total sales grew by 13.1% to AUD 122 million. Like-for-like sales grew by 7.8%, with 8.9% growth in Australia and 5.9% in New Zealand. Growth was driven by an increase in both the number of transactions and the average transaction value. Gross margin declined by 60 basis points due to the clearance activity early in the half to manage seasonal inventory. Segment PBT increased by AUD 5.4 million to AUD 7.1 million, and the PBT margin of 5.8% was up 420 basis points on the prior year. I would now like to hand over to David Burns to talk in some more detail to the financials.
Thank you, Paul. Group unallocated costs on slide 21 increased by $10 million in the period. This increase is primarily due to the increase in previously flagged project costs, with the transition to the new Victorian Distribution Center and the implementation of a new HR core and payroll system. Both projects are proceeding as planned in the second half. Turning to slide 22. Total inventory increased by $19 million or approximately 2%, reflecting the expansion in the store network, with overall net inventory per store in line with the prior year. Supercheap Auto inventory per store was lower, following a solid sell-through over the Christmas trading period, whilst rebel's inventory levels were impacted by delays in the receipt of stock from key suppliers.
BCF inventory per store increased, reflecting a softer than expected peak trading period, although the strong in-stock position at period end has been an enabler of a stronger sales momentum in the first eight weeks of the second half. Inventory quality remains high, with aged inventory levels below target. Moving to slide 23. Operating cash flow of AUD 416 million represents an increase of AUD 27 million or 7% above the prior year, reflecting favorable working capital movements, which are standard in the first half of the year. Operating cash conversion of 125% remains strong. Total capital expenditure of AUD 62 million was AUD 37 million lower than the previous corresponding period, reflecting a lower weight of CapEx in the first half of FY 2026 due to project activity being skewed to H2.
Dividends were lower than the prior period, reflecting the lower special dividend payment relative to the prior year, partly offset by higher rent lease payments in the period. I'll move to slide 24, Dividends and capital management. The board is determined to pay a fully franked interim dividend of AUD 0.32 per share, in line with the prior year and within the group's 55%-65% payout range of underlying earnings. Surplus cash on hand at the end of FY 2025 was returned to shareholders by way of a special dividend during the period, and the group finished the second half with a strong balance sheet and net cash position of AUD 107 million. Returns and capital ratios. The group delivered normalized EPS of AUD 0.54 in H1, down 6.7% on the prior year.
Pleasingly, post-tax return on capital was 18.1% for the 12-month period to December 2, 2025, comfortably above the group's weighted average cost of capital. The average net cash position was below the prior year, following the return of surplus cash by the special dividend payment. Turning to slide 26, we're pleased to report the further progress on our new Victorian distribution center, which is open and operational, serving rebel stores in the southern states with no disruption to fulfillment activity. Operational testing of automated capabilities was successfully completed in the period and are due to come online in this, the second half of FY26. We're progressing through a phased opening schedule to minimize the risk to operations, with the remaining brands scheduled to transition to the new DC throughout this calendar year.
Once fully operational, the new distribution center will provide a step change in our online and home delivery capabilities, whilst allowing us to optimize our national distribution center footprint and deliver operating efficiencies, greater scalability, and working capital savings. Turning to slide 27. Capital expenditure envelope has evolved with various projects over recent years. Investing in new stores and refurbishments is a constant element and will continue to underpin the CapEx envelope in the short to medium term. CapEx on loyalty peaked in FY 2024, is now largely complete following the rollout of the rebel Active and Supercheap Auto Spend & Get loyalty programs. FY 2025 represented the peak period of investment for supply chain, with the new Victorian distribution center now operational, spending is expected to moderate in FY 2026.
Investments in systems and technology commenced in 2025, and is anticipated to grow within the capital expenditure envelope in the coming years. That's a summary of the financial information. I'll now hand back to Paul.
Yeah, thank you, David. I'll now take you to slide 29, the group strategy. This lays out the five pillars of the previous strategic arc, and we're pleased with the progress that we've made in each of these areas. Focusing on our four core brands has really allowed us to continue to deliver strong revenue growth over and above the step change from that COVID period. Our customer metrics have improved substantially across all four brands, leveraging through our personalization, our loyalty program, in ways many of our peers cannot. However, our recent focus and attention has been on the opportunities that lie ahead, and I'm excited about the opportunity to share our new strategic vision for the next five-year arc at our Investor Day in June. More information around that event will follow in due course.
Taking you to slide 32, the trading update. Group like-for-like sales momentum has been positive in the first eight weeks of the trading first half. Supercheap Auto has continued to deliver solid top-line growth, led by stronger growth in Australia, and consumers responding positively to the improved ranging initiatives that the team have delivered in the stores. Like-for-like growth at rebel continued to be impacted by inventory availability challenges, following supply chain disruption at a number of key suppliers. BCF reported a pleasing return to growth, cycling double-digit growth from the prior comparison period. Moderating headwinds from the first half, and strong in-stock position at the end of December contributed to an improved momentum. Macpac has continued its strong growth momentum into the period, and the team is focused now on delivering the fourth quarter, all-important peak winter trade.
With that said, I will now hand back to David, the operator, for questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up your handset to ask your question. The first question comes from Michael Simotas with Jefferies. Please go ahead.
Good morning, everyone. The first question from me is on the trading update. In the past, you've called out some timing impacts of Boxing Day. Boxing Day is getting very close to the end of your half. Did that materially impact either the period that you've disclosed in the trading update, or the first half result that you've reported?
Look, I think it's obviously getting very close with our financial close on the Saturday, 27th. We are within two days of Christmas. We do include Boxing Day in the result and the day after, but we don't have the benefit of the post-Christmas period. Just to highlight, we will be moving out. We'll have a 53-week year next year. That will move out. Yes, it's a stronger trading period, but it's only one day difference, Michael.
Yeah, would have, I guess, would have been a modest drag for the first half result and a modest benefit for the trading update. Is that the right way to think about it?
Yeah, one day being modest. Yes.
Yep. Okay. No, no, that's helpful. Did you see any change in consumer behavior that you can see when you look across your brands or across your regions from the interest rate hike in February or the rhetoric in the lead up to that interest rate hike?
Yeah, I would call out that the RBA sort of started to rattle sabers in mid-December.
Yep.
that did coincide with the Bondi event.
Yep.
We certainly did see a softness in that run up to Christmas, and it's, it is difficult to distinguish between what was what there. Certainly the consumer was more cautious running into Christmas, and that was certainly across all businesses. That was certainly something to consider. We haven't seen, I don't think, the benefits yet from the original rate cuts coming through. That takes up to nine months to pass through. Similarly, I don't think we're yet seeing the impacts of the rate rise. Certainly, I think the tone of that change is probably a cloud over the consumer at the moment that's that will take time to play through.
Makes sense. Then just a quick one on rebel gross margins, and in particular, stock loss. You've stabilized stock loss, so it was no headwind in the first half. Mathematically, does that mean that even if you don't get any more or any improvement, it should flip to a tailwind in the second half for gross margins for rebel?
that one. We've been having a really good look in this space right the way through from Black Friday, all the way through to current performance. The important thing in this space, it's retail. It goes back retail for many years, is really focusing on if you're going to dilute those margin rate, you've got to increase the volume of product that you bring in to mitigate the offset. We didn't do a great job in that space. We've learned from that and, as I said in the presentation, that is what we are completely focused on.
Okay. you promoted with not enough inventory, is what you were saying. you should have had more stock weight to fulfill the demand-
That-
Get the benefit from the promotions?
That's correct. Yeah, if other retailers are gonna reduce the price, you've got to stick to your own plan, and you've got to plan that well in advance. As you know, with rebel, it's a long lead time.
Yep.
That has to be really well planned, and you've got to drive the volume of those key products in to offset the margin decline.
Yeah
in margin.
The stock loss piece, theft, should that flip to a tailwind?
Yeah. The stock loss has been stabilized, and we're,
Yep
Pleased with the initiatives that we've put in place. We would see that as an opportunity, but I think it is a very, that the external environment continues to be very challenging and we would, we're just cautious as to whether that's the timeframe by which we were able to convert that from being stabilized to actually returning to historical levels. We wouldn't say that it is an opportunity in the calendar year ahead. I wouldn't say it's an opportunity in the half ahead.
I think what I just to build on that, Michael, what I would say is, we've got many initiatives in those trial stores. I think we talked about it in August. Those are performing well for us. The team are actually pushing me, you know, can we push some capital into to land those initiatives? It's important we measure to identify exactly which ones of those initiatives are really performing well for us. Yeah, our job then will be great, we've stabilized. Now, we've got to really go after a saving in that space.
Yeah, that makes sense. Thank you and well done.
Thanks, Michael.
The next question comes from Shaun Cousins with UBS. Please go ahead.
Thanks, good morning, Paul and David. Maybe just a question on rebel and the availability issues in the first half and then into the second half to date. Was the responsibility or the cause of the availability issues, you've highlighted how much of it was rebel, not ordering enough stock or not having enough stock behind promoted items, and maybe how much of it was supplier partners? Was it skewed one way or another? Into the second half to date, has the discounting that you saw in the second quarter, has that continued on into the new year, or is that moderated a little?
I'll answer the second one first, 'cause that's probably a bit easier. Yes, it's moderated a little. And we're staying out of that space, 'cause as I said earlier, if you don't have the volume, there's no point in going in hard in that space. What I would say is, the rebel team delivered a credible top-line performance, Shaun. We've seen that both in market share, and the like-for-like performance against many of our competitors that have delivered weaker numbers. We've done the right thing. I wouldn't comment on the split between, you know, our key brand providers who are supporting us really well. In fact, we've got weekly meetings with them, and we're making good progress to stabilize our position on availability.
I would say, you know, we let some goals in there that is absolutely in our hands, and as I said on the call earlier, we will be absolutely focused and the team are focused in that space right now. We're starting to see that product flow through.
Fantastic. My second question is just on currency. I think in the first half, you've got a lower realized currency, so it feels somewhat of a headwind sort of there as well. David, maybe you could talk a little bit about how you anticipate the rising Aussie dollar to help you to assist in the second half and the fiscal 2027 period, maybe with a reminder of sort of broader hedging practices, please.
Yeah, look, our hedging requires us to hedge for the next four months. We, or the four months ahead of us, between 55% and 75% hedged. The period eight months after that, we're sort of between 0% and 50%. We are sort of slightly higher on the hedge book. We will get the benefit of this higher currency environment over time as a consequence of the hedged hedging of policy. It will be a potential tailwind for us in this calendar year, with it getting a stronger tailwind as we go into the second half of the calendar year.
Understood. Great. Thank you very much.
Thanks, Shaun.
The next question comes from Bryan Raymond with JP Morgan. Please go ahead.
Thanks. Just a further one on rebel. I just wanted to get a feel for how the relationship is going with the key brands in a little bit more detail. There was quite a, you know, gross margin impact as there was competition in that, in that November, December period coming from a number of competitors. I assume some of your brands and their own retail stores were part of that. You've developed this loyalty program, rebel Active, which is quite generous to customers, and just trying to work out how much that contributed to the performance that you saw over the period, and whether that's an attractive channel for these brands and competitors to be clearing stock, if that is what they need to do. That'd be my first question.
Thanks.
Yeah, thanks, Bryan. I would say we've got a good relationship. Gary and team have a really good relationship with our trade partners. I was actually with some of our trade partners over the last couple of weeks, and I think we both sat down and kinda said we've both got opportunities here to grow together, and I would echo that last comment. It is really important that we grow together, and that's vital. That's planning over the long term, not the short term. Quick win games, that's not what we're after. We are absolutely for the long term. Planning those volumes together is really important.
Okay. Then just to, just to continue on the loyalty theme as well, within Supercheap Auto, you've gone through the first peak season with the new program. I'm just interested in sort of how that contributed, do you think, to like-for-like sales and gross margin, if there's anything you can call out there as the first real test for it?
Yeah, I think, it's early days to say. The program's been in just six months, a little bit early to comment, but talking about, you know, the success of it, of the program, the right move was removing Best Price Credit one year ago. We took that out of the market, you'll recall, so that the team could focus both on giving great value to the customer as well as the Spend & Get program. We're pleased with that. We're pleased to maintain those gross margins that we've just posted.
Okay, just a final one for David, if I could. Just on the longer term CapEx trajectory, talk through a few, you know, lumpier elements of the CapEx in recent years around systems, supply chain, loyalty, et cetera. Should we be thinking about a $150 million sort of envelope per annum going forward, or is there scope for that to fall back to where it was, you know, prior to FY 2024, or in that direction at least? Thanks.
There'll be an aspect of it being more elevated than historically, just as a consequence of the store activity that we see as an opportunity over the next number of years. There's just, there's other opportunities that we see to improve performance through some investment in systems and the like. As you can see, we've got a strong cash position, and we're quite comfortable to be putting more capital down for growth. I would be allowing that circa AUD 150 level to be retained for next, in the sort of foreseeable future, 'cause we've that's probably...
We'll obviously speak to it in more detail when we do the strategy day in June, certainly that circa 150 level is we think would be appropriate.
Okay, great. Thanks.
The next question comes from Adrian Lemme with Citi. Please go ahead.
Good morning, Paul and David. Sorry, more questions on rebel. I was just interested, you talked about a lot of refurb activity. If you could give an update on specifically how RCX, that concept, is doing in rebel, how many have been completed, how many left? Are the older ones starting to fade, or are you happy with how those are performing, please?
Yeah, look, the RCX format has been a successful initiative. We've pretty much got to the end of the major top 25 doors, which was the basis of that initiative. We've then looked to cascade the RCX format in terms of its the opportunity to improve the experience in stores through the network now. We would say that that's complete in terms of the top 25 doors. There's still a couple that haven't been done, but overall, our focus is now on extending certainly the benefits of the experience. You'll see that in sort of the worlds of football or basketball. You'll see that in a number of the new stores that we've opened in regional areas as well, which have got high-quality execution.
That's allowed us to bring a stronger range to those marketplaces as well. Our initial activity was to get the top 25 doors done. Now it is about cascading that through the rest of the network in a more moderated, less, certainly, you won't have those experience zones, but the benefits of merchandising improvements in the store, you'll see quite an uplift over time.
Thanks, David. The original ones that were done, you're still happy. Obviously, they saw a big uplift, certainly on, but you're happy that those have held?
No, we're happy with those uplifts. We are certainly always looking for opportunities to improve them. There'll be those sort of adjustments that we'll make to those stores to continue to maintain strong momentum on them.
Thanks. Just one quick one, World Cup, this year. How material should that be for rebel in June, or do you think it's more of a July thing, please?
Look, it's certainly always an opportunity, but there's always an event. It'll be cycling, the Lions. I've just got to be careful of adding in upside, because it'll be on top of something that occurred in the prior year. Yes, it'll be both a June and July benefit, but it'll also be cycling on top of the Games activity that came through.
Understood. Thank you very much.
The next question comes from James Leigh with Goldman Sachs. Please go ahead.
Hey, guys. My question's just on the BCF trading update at +4.1% like-for-like, which was very strong considering a double-digit comp in the year prior. Can you help us understand how much of that contribution is from that better availability? How we should think about kind of the underlying trend in that market?
Yeah, James, thanks for the question. It's, it certainly played into the performance. I'll go back a year, actually, we knew we'd left opportunity on the table, in fact, two years ago. I really focused on getting the right product in the right stores, and we maximized that opportunity last year, so delivered some strong growth, as you saw. This year you've had, yes, the product was there, but more importantly, the weather was pretty rough right up to Christmas, and that was a real challenge for the BCF team. As soon as it turned, and you literally saw it turn, particularly down in Victoria in January, we got the upside. It puts us in a good place as we go into Easter trading.
Great, thank you. Maybe just to follow up on that, like, in terms of the exit rate from that period, like, do you feel comfortable that, like, it's still a reasonable comp from last year? That with kind of some of those tailwinds like, that you'll be able to kind of achieve like, that sort of normal run rate?
I do. I think, you just look at the two-year growth for BCF. I think it's pretty close to 20 points, you go that is a really good number in January performance. Yeah.
Just across the board for all the businesses, we did have the cyclone come through in March in through Brisbane. That did have some disruption in H2 last year, and there will be some slight noise in the comp there.
Just remembering, James, we've got some big numbers to comp in the remainder of the year. Easter's a little bit later, so that's more of a challenge for the BCF team.
Okay. Thank you very much.
Yeah. Cheers, James.
The next question comes from Craig Woolford with MST Marquee.
Hi, Paul and David. Just two questions, if I can. The first one, just on this new distribution center, can you just clarify for the online piece, how significant the change is to online fulfillment as you ramp up the use of the Victorian DC? Like, Is it all direct from store at the moment? You know, what do you see as the benefits for the online part of your business from the new DC?
The new DC's got goods-to-person technology. It's fairly mature technology, but it is, that's what we've invested in. The benefit will be to be able to do... There are specific online picking stations that are in the facility. The benefit will be, we'll be able to execute more efficient and goods-to-person, then the location of the Truganina facility also allows us to interface effectively with Australia Post. The opportunity then is to execute that for the southern region and have reduced need to pick from stores. The challenge is obviously with stores, is that you've often got inventory both in the back of house and on the floor.
Mm-hmm.
Which is expensive to get people moving between both locations. It's a far more efficient pick, and it's also a better interface for online, sorry, for freight, I should say. Both those are going to be advantageous to the entire southern part of our network. That will be the benefits.
Right. Only for delivered, right? Because Click & Collect is still quite big in some of the businesses.
Oh, totally. It's gonna have a stronger impact, certainly for rebel, which has the 20, circa 20% online-
Mm-hmm.
A higher proportion of home delivery. You've got obviously, Click & Collect in, is around two-thirds in BCF and Supercheap, because you've got more dangerous goods and bulky items.
Yeah. Understood. Can I ask you a question about lease costs? I'm using the combination of the right-of-use, asset amortization, and the lease interest.
Yep.
The numbers are correct. That was up 12.5% year-on-year in first half 2026. It looks like a very significant increase. Can you give a bit more background as to the magnitude, and is that going to continue?
Yeah, certainly it stepped up in H2 last year. It's particularly rebel, as rebel, it sort of borne a higher proportion of that. There is a bit of, as major leases are signed, you do tend to get a higher upfront cost on those larger leases. We had Bondi, Broadway, or actually, if you look at all that store activity.
Mm
highlighted with rebel, where you had old leases running off and new leases commencing, you do get a step change, and that occurred both in H2 last year and H1 this year. I think on a half-on-half basis, it's gonna be more neutral as you go into H2 against H2. It's, There's been a step change, that's right, but it's been probably more acute in its presentation in H1 than it will be in H2.
Yeah, that's very clear. Thanks, David.
The next question comes from Josephine Forde with Bank of America. Please go ahead.
Good morning, Paul and David. My question is on, can you just talk through some of the ranging initiatives for Auto's first eight weeks of trading? Maybe in the half, did transaction volumes grow? I know you've called out transaction value growth, did volumes actually grow for Auto?
Yes. I'll answer the second question first. Yes, yes, it did grow. There's no doubt about it. Ranges such as Rhino-Rack, NGK is just landing, but Rhino-Rack, we landed middle of last year. As consumers, and we let them know we've got that key product, which I think is 50% of the volume of all Australian vehicles have got a Rhino-Rack on. They're key products-
Right.
Key ranges you've got to have in your stores. That's just one example.
Okay, thank you. Maybe just on the strategy update, don't want to get ahead of what you'll show us in June, but should we anticipate that the business would look at potential inorganic growth opportunities going forward or assume more of a status quo, grow the network and omni-channel strategy?
Yeah, Josephine, we're focused on our organic growth internally. We've got a huge opportunity. You know, I just look at the three categories that we play in with leisure, sport, and auto. Those three categories are worth $60 billion across New Zealand and Australia. We're gonna post a number, it'll have a four, you go, that's where the opportunity lies, that's where we've got to get after it. You know, you touched on the question with Supercheap Auto. That's just one area forward, right? Increase the range, we'll benefit, we'll get a fair share of that $60 billion market.
Great. Thanks very much, guys.
Thanks, Josephine.
The next question comes from Melinda Baxter with Morgan Stanley. Please go ahead.
Thank you both for taking my call. Just a couple on rebel, if I may. It's good to say that stock loss isn't getting any worse. Are you able to quantify the cumulative GP impact from stock loss?
No, we haven't quantified it previously. Sorry, we did last year for rebel. It's not been a substantial item in the other brands. There's been some headwind there.
Yes, sure.
I think last year we did quantify the stock loss figure, we've not, which was 70 basis points impact. We haven't gone and communicated the total figure previously.
Okay. Maybe just on rebel loyalty program. Obviously, it's been a promotional period, and you've had some inventory issues, but just curious if that program has performed first, you know, your expectations against this backdrop?
Yeah, Matt, the rebel loyalty scheme, it's now been in, what, two years? There's much to be positive about. You look at the gold and silver customers that we measure, those customers that frequent are increasing the amount of times they visit our stores. Their basket is higher, so we've got some strong performance in that in those categories. That mid-tier, where you probably recognize as, I don't know, silver frequent flyers, I think we've got opportunity in that space to be more effective with how we talk to those customers, to get them in with more visits, and a bigger basket. I think I had a recent example with Leah in our Everton Park store just recently, she was challenging me on, "Are we clear enough?
Is the clarity and the message to our customers clear enough for, particularly for those customers?" I think she's absolutely right. I ended up talking to two customers as they left the store, and the first customer was very clear: "This is the reason I come to rebel." They're, they're our goals and probably shifted from a silver to a gold. Equally, I had another customer that was very clear on, no, didn't realize she'd obtained the value, and that's what we've got to address within the program. That's been completely transparent with you.
Great. Thank you. Very clear.
All right. Thanks, Melinda Baxter. I think we've got time just for one more question.
Okay, the next question comes from Michael Toner with RBC. Please go ahead.
Hey, team. Thanks for taking my question. Look, Supercheap, just following up on Josephine's question. What more do you think can be done here in terms of store format and range to continue to build on some of those positive market share trends you're experiencing? You have specifically called out ranging as a driver of that positive comp performance.
Yeah, ranging is absolutely a key driver of that. We will continue focusing on those new brands. They are, you know, Juicy Couture, over just the last two weeks, seriously, the numbers that that has delivered for us is outstanding, and we have got to ride those waves. We've got to get those products, and we've done that, we've done that well, and there's more opportunity in that space. On what our formats will look like, I, you know, I think we've got opportunity in that space, but I'll hold until June to share with you exactly what's on our mind in that space.
Okay, great. Thank you. Sorry, if I may, just on rebel, I just wanted to clarify what you said in response to Mike's question earlier. Just in terms of getting line of sight on getting those availability challenges resolved at rebel, were you saying that that's more of a calendar year 26 story instead of a two half 26 story? Then sort of, I guess, in terms of the controllables today, you can make sort of some immediate adjustments to your pricing strategy. Am I thinking about that correctly?
I think the way I'm thinking about availability is it's not a short-term fix. I reflect on the playbook actually in BCF, going back five years ago, where we saw the opportunity on the table pre-Christmas with key 80 SKUs that 80 lines that we were chasing. We've maximized that opportunity, learned, and learn every single year, that's what we need to do in the rebel space. I think, you know, we will make significant improvements this year, it's retail. We will find further opportunities. We won't fix every single availability piece, that's just retail. That is the focus. That's where the team are focused, that's where we'll see the benefits in the year ahead.
Okay, great. Thanks very much. Really appreciate your time.
Thank you, Michael.
There are no further questions at this time. I'll now hand back to Mr. Bradshaw for closing remarks.
Well, yes, I'd just like to say good morning to everybody. Thank you for your time on the call. I wanna say a particular thank you to our team members who delivered the numbers that we've just put in front of you. I look forward to seeing many of you over the course of the next few days. Have a great day.