Super Retail Group Ltd shares plummeted after it announced a slight lift in first half sales, despite a number of internal challenges weighing on its performance.
At the 1015 AEDT official market open, Super Retail shares were 18.85% lower at $10.20, against a benchmark index fall of 0.16%.
In earlier trade, Super Retail dropped more than 20% to as low as $9.50. It was the lowest Super Retail shares had hit since the week beginning December 17, 2012, when shares touched as low as $9.42.
In the 26 weeks to December 28, Super Retail's sales totalled $1.096 billion, a 6% increase on the prior corresponding period.
As a result, the group expects to report a net profit after tax of between $61 million to $62 million for the half, which equates to an increase of between 0.7% and 2.3% on the prior comparative period.
Like for like sales growth across the three key segments was also relatively strong. Auto grew 2.3 per cent, leisure 1.6 per cent and sports 5.5 per cent.
During the period, the auto division opened four stores and closed two stores, the leisure division opened 10 stores and closed one store, while the sports division opened nine stores and closed the remaining seven Goldcross Cycles stores.
The sports division also acquired 21 Workout World stores in the half.
Super Retail chief executive officer Peter Birtles said the overall result was below expectations, reflecting a number of short term internal challenges across all three divisions.
"We are pleased that the underlying like-for-like sales growth across our three divisions continues to be solid, and that our auto business continues to deliver margin improvements," he said.
"Good progress has been made in extending the Amart brand in Victoria and New South Wales with sales meeting expectations and set-up costs being expensed in the period.
"The results reflect a number of short-term challenges across the Group and execution has not been up to the standard we expect."
He said the implementation of new IT systems in particular had impacted all businesses, most notably the sports division.
"These IT systems issues have now been resolved," he said.
"The impacts of the mining slowdown and cannibalisation from new stores on like for like sales performance in our leisure division have been higher than expected.
"Increased promotional activity to drive sales performance impacted gross margin but did not achieve the projected sales uplift."