January 17, 2018 / 5:05 PM / 3 months ago

Mixed fortunes for South African retailers as Mr Price ups sales

JOHANNESBURG, Jan 17 (Reuters) - South Africa’s Mr Price reported a 8.3 percent increase in third-quarter sales on Wednesday, while clothing retailer Truworths International flagged lower half-year profit.

While some clothing retailers in Africa’s most advanced economy have reported better sales than others this week, Truworths and Woolworths Holdings warned profits will be lower as consumers spent cautiously over the festive season.

Political and policy uncertainty hobbled business and consumer confidence for most of last year, but victory for Cyril Ramaphosa, who is viewed as pro-business, in the ruling African National Congress’s leadership battle is seen as reversing this.

Mr Price said total retail sales were 6.6 billion rand ($539 million) for the three months to end-December, buoyed by the retailer’s core clothing division.

“Despite a competitive retail environment, well executed merchandise offers resulted in lower markdowns and an improved gross profit percentage over the comparable period,” Mr Price, which also sells homeware and sporting goods, said.

Sales by Mr Price’s clothing division were up 11.3 percent.

Truworths said it expects diluted headline earnings per share for the 26 weeks to 31 December to fall by up to 5 percent to between 372 cents and 380 cents. Half-year sales rose by 1 percent compared to the directly corresponding period.

Data on Wednesday showed that South African retail sales jumped in November by their biggest margin in more than five years as sales in clothing, footwear and furniture rose, as the economy showed further signs of recovery.

Clothing retailer The Foschini Group and food retailer Shoprite Holdings on Tuesday reported higher nine months and six months to December sales, respectively.

However, Woolworths warned on Monday that its half-year profit could drop by as much as 17.5 percent. ($1 = 12.2519 rand) (Reporting by Nqobile Dludla; editing by Alexander Smith)

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