(Adds CEO, analyst comment, share price)
JOHANNESBURG, April 19 South Africa's Pick n Pay
reported slower sales and profit growth in its
full-year results on Wednesday, sending the retailer's shares
lower despite an 18 percent rise in earnings.
Retailers in Africa's most advanced economy compete fiercely
for customers whose spending power has been hit by inflation
running above 6 percent and weak economic growth.
Pick n Pay said headline earnings per share (EPS), the most
widely used profit measure in South Africa that excludes some
one-off items, was 264.35 cents in the year to the end of
February, up 18 percent on the 224.04 cents a year earlier.
But the retailer's profit growth slowed from 26.4 percent in
the previous year as consumers at all income levels had less to
spend, chief executive Richard Brasher told Reuters.
The results were weaker than expected with sales volumes
sliding 2.5 percent, said Sasfin Wealth analyst Alec Abraham.
"They seem to have lost momentum in the second half of the
year," he said.
Inflation in South Africa was 6.1 percent in March, lower
than February's 6.3 percent but still higher than the upper end
of the central bank's target of 3-6 percent.
"What we do see is people would trade into smaller pack
sizes mid-month or maybe choose a Pick n Pay no-name product
where maybe otherwise they would have chosen a brand," Brasher
Sales grew 7 percent, slowing from last year's 8.2 percent,
reflecting the difficult trading environment and some disruption
from store refurbishments and closures, the firm said in a
Shares in Pick n Pay were down 4.3 percent at 61.77 rand by
1207 GMT, compared with a 0.6 drop in the Johannesburg
Securities Exchange's general retailers index.
(Reporting by TJ Strydom; Editing by Sunil Nair and Edmund