The New Zealand arm of Rebel Sport has seen a sales boom in the second quarter to July 26, driven by major sporting events locally and globally.
Owner Briscoe Group – which also manages Briscoes Homeware – saw Rebel’s sales jump 4.84 per cent in the second quarter, offsetting a revenue slip in its sister subsidiary.
Briscoe Group managing director Rod Duke said Rebel’s sales benefitted from strong customer engagement generated by several significant sporting events and successes during the period.
“The FIFA World Cup, Auckland FC's A-League triumph, the Warriors' strong NRL campaign and the All Blacks' successful home programme in the Nations Championship all helped generate excitement and a stronger connection with sport among New Zealand consumers,” Duke said.
Sales would have also been buoyed by the launch of Rebel’s revamped loyalty program, Rebel Sport Club. Duke said this introduces a new rewards system to drive frequency and transaction value, deepen customer engagement and improve personalisation.
The performance of Rebel in New Zealand added to total sales for the quarter of NZ$193.4 million, which nudged up slightly by a quarter of a per cent. The suffering sales growth was dragged by Homewares, with sales there declining by 2.17 per cent.
Duke said this reflects lower-than-expected demand for heating products due to a milder start to winter, weaker luggage sales as geopolitical tensions affected travel activity, and ongoing pressure on discretionary consumer spending in general.
Across the first half, group sales increased 0.79 per cent to NZ$374.2 million, with sporting goods increasing 2.56 per cent and homewares decreasing 0.30 per cent.
Online sales across both retail entities increased by 2.07 per cent during the half, a jump of NZ$1.5 million. Online sales represented 19.60 per cent of total group sales compared to 19.36 per cent last year.
Briscoe Group also launched a new distribution centre in the country, and spent around $900,000 on a new ERP software suite.
Duke said profitability for the first half will reflect these significant items, alongside net interest income that is around NZ$1.9 million lower than last year. Despite this, the group is projecting a net profit after tax for the six months ending July 26 to close at no less than NZ$27 million.
“Although economic conditions remain difficult and recovery continues to be slower than anticipated, we are encouraged by the sales resilience achieved during the first half,” Duke said.
“The additional operational costs from the new distribution centre and SAP [ERP] project costs account for the difference in profit shortfall when compared to last year’s first half.”
Meanwhile, group profit percentage appears to be stabilising. For the first half, gross profit percentage is expected to be around 57 basis points below the same time last year. This is an improvement on the 115 basis point decline for the full financial year last year.
“This is especially encouraging given that we estimate the weaker New Zealand dollar diluted margin by around 30 basis points,” Duke said. “This improvement reflects the benefit of initiatives implemented over the past eighteen months, although retail conditions remain highly promotional and consumers continue to be very responsive to price and promotional activity.
“Ongoing geopolitical tensions in the Middle East have added to cost pressures and broader economic uncertainty. Preserving sales momentum while rebuilding gross profit percentage remains a delicate balance and continues to require careful judgement from our merchandise and marketing teams.”