JOHANNESBURG (Reuters) – South African fashion retailer Truworths warned on Friday that its half-year profit will fall by up to 8%, mainly due to a decline in sales and gross profit margin in its Africa business.
The upmarket retailer has seen a decrease in profit over the past year as customers, squeezed by high interest rates, cut discretionary spending.
Truworths, which also owns UK-based shoe retailer Office, sees its headline earnings per share dropping by 4% to 8% in the 26 weeks ended Dec.29, down from 512.6 cents last year.
Its shares were down 2.4% by 0922 GMT.
The retailer, whose brands include Daniel Hechter, Uzzi and Naartjie, said group retail sales in the period grew by 2.4% to 12.5 billion rand ($670.60 million), a slower growth rate compared to 8.2% sales growth in the previous comparable year.
The main cause of the drag was its Africa unit, which reported a sales decline of 1.1% to 8.3 billion rand during the period, which included Black Friday and Christmas trade.
The group’s Office UK business reported retail sales growth of 11.3% to 180 million pounds ($223 million), driven by its successful store modernisation and expansion programme, and e-commerce platform, it said.
($1 = 18.6401 rand)
($1 = 0.8062 pounds)
(Reporting by Nqobile Dludla; Editing by Emelia Sithole-Matarise)
