I thought it was a remarkably good result, in both ANZ as well as the US.
Despite the disruptions and store closures due to Covid (especially in the US), both geographies managed to increase their Sales by 7% as well as increase EBITDA margins by a full 80bpp (ANZ) and 60bp (US).
That's difficult enough to achieve in a largely fixed cost business during normal trading conditions, let alone when you are in the middle of a major global pandemic.
But especially the US business which reported a 17% increase in constant currency EBITDA (and which I estimate translated into at least a 25% EBIT increase.
Think about that for a minute:
An increase in Operating Earnings by a factor of one-quarter.
Right in the middle of a pandemic which is causing intermittent shuttering of stores combined with increased Covid-related CoDB.
At the Group level, NPAT increased by 17%, but on a constant currency basis, the underlying growth rate is running above 20%.
And again, that impressive achievement during a period of disrupted business conditions, something which is normally very bad for a business with relatively low Gross Margin, and a relatively high fixed cost structure.
It is really quite an astonishing outcome, and one which exceeded my expectations (which I thought were aggressive).
But, as been inferred by others on this thread, it depends what has already been factored into the share price by the market.
REH reminds me of two other high-quality stocks I follow closely, namely ARB and BRG.
Like REH, both simply world class businesses.
Both have meaningful international businesses.
Both have valuation multiples of a similar order of magnitude to REH's.
Both reported sensational results.
Both reached record prices on the day of their respective results, but have since fallen by some 10% in the subsequent week or so (to be fair, the overall market has eased too, but nowhere close to 10%).
I suspect REH will follow suite.
PS. At the time of writing, I glanced over to a different screen where I notice the A$:US$ rate has breached 0.80, it's highest level in more than 3 years... so far, the market appears to have been conveniently ignoring the impact of the strong A$ on the earnings of offshore earners, such as REH.
Knowing, as I do, the financial media (which is always looking for attention grabbing headlines) and the stockbroking community (always looking for reasons to get clients to place orders), I would not be surprised if 0.80 is some sort of psychological level which focuses the market's collective eyes on the impact of the currency in coming weeks.
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