Bushfire concerns hit Super Retail shares

Super Retail have been hit amid concerns bushfires sweeping the nation could hurt the retailer’s outdoor business.

There are fears the bushfire crisis will affect BCF sales

Shares in Super Retail have been sold off amid rising concern that bushfires sweeping the nation could hurt the retailer’s outdoor business.

The bushfire crisis has already sapped consumer confidence and weighed on retail spending across the economy during the summer months. Shares in Super Retail on Thursday closed down 6 per cent at $9.77.

Brokerage Ord Minnett downgraded Super Retail to hold, warning that bushfires could hurt the group’s BCF stores, which are geared at camping and fishing.

Super Retail also operates ­outdoor adventure wear store Macpac.

In a note, Ord Minnett said the camping and outdoor focus of the BCF chain was a ­direct risk to earnings as fewer consumers took holidays, coupled with the group’s regional store location skew across its Super Cheap Auto and Macpac chains.

Adding to that, it said an indirect threat for consumer discretionary stocks more broadly was a reallocation of funds from retail spending to donations.

Brokerage Morgans kept its add recommendation on Super Retail and a $9.80 share price target, but also called out fallout from bushfires. “Clearly BCF is most at risk, particularly in NSW and Victoria, although the business’s heavy weighting to northern Queensland may buffer any impact,” Morgans analyst Jo ­Little said. “Macpac is also likely to have suffered given its outdoor exposure.”

BCF contributed 12 per cent of Super Retail earnings in the 2019 fiscal year and Macpac delivered about 6 per cent of earnings.

Morgans said Super Retail’s remaining businesses, including its flagship Super Cheap Auto, “may also have suffered some mild impact” from store closures, falling confidence and poor air quality in affected regions. However, Morgans said this would be a short-term issue.

Super Retail hands down its first-half results next month.