To your point, I guess there are a couple od things that need to be considered for SUL.
1. Decline in sales revenue
2. Eroding of profit margin due to discounting i.e. even if revenue is flat
3. Debt repayment and its impact on income
4. Auto parts has been the star performer that has always held up however slowing car sales may have an impact (including after market parts)
5. BCF performance
Considering Kmart has had a tough year, SUL will most probably have a tough year considering all SUL stores are not primarily discount stores.
The problem is you can run numbers with assumed impacts and come to figures but we will never know until results or an update is provided. But in saying all this, it does seem to be factored in, at least most of it. If the impact is limited and leaves the dividend untouched, we could probably see a slow rise to $7. Forward looking statements provided for the next 6 months will be the key factor to impact SP as opposed Jul-Dec trading period update. Rant over.
SUL Price at posting:
$6.38 Sentiment: Hold Disclosure: Held
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