RCG offering long-term value after selloff

A strong FY16 result was somewhat overshadowed by a relatively soft trading update for the first eight weeks of FY17. The competitive pricing pressure which impacted The Athletes Foot (TAF) in July has since eased, while the softness in Hype should normalise as further exclusive products hit stores and delivery delays are resolved. Despite the softer start to the FY, this conservative management team has maintained FY guidance, which speaks volumes in our view. Following the results, our EBITDA forecasts are broadly unchanged (-1%). On a long term view, we see value after the recent sell-off but acknowledge outperformance may be capped until more positive like-for-like sales momentum is visible in Hype and The Athletes Foot. Get our latest update, including the analyst rating: (VIEW LINK)