By Siyanda Mthethwa
JOHANNESBURG (Reuters) -South African fashion retailer Mr Price reported a 6.5% rise in half-year earnings on Thursday, helped by strong retail sales growth.
Mr Price, which also sells home ware and sports equipment, reported HEPS, a key profit measure, of 513 cents for the 26 weeks ended September 30 compared to 481.1 cents a year earlier.
The group’s total revenue climbed 5.4% to 18.6 billion rand ($1.08 billion) with group retail sales growth of 5.5% to R17.8 billion rand, slightly ahead of the comparable market’s 5.3% growth, the company said in a statement.
The first quarter was characterised by shifting school holiday periods, which supported retail sales growth of 6.3% and helped the group gain market share.
Discounts in June however compressed group profit margins by 20 basis points. The group and the broader sector recorded a negative sales growth that month.
Mr Price, which has over 3100 stores, said store sales increased by 5.4% and online sales were up 9.7%.
Despite delivering strong earnings growth, the company warned that macroeconomic pressures continued to strain consumers.
Negative wage growth has compromised household disposable income which has resulted in “weak levels of consumer expenditure”, it said.
The group declared an interim dividend of 323.2 cents per share, up 6.5%.
($1 = 17.1944 rand)
(Reporting by Siyanda Mthethwa; Editing by Muralikumar Anantharaman and Ronojoy Mazumdar)
