Mr Price's full-year profit grows
ONWARD AND UPWARD: A shopper pushes a trolley outside a Mr Price branch.Photo: Reuters

Mr Price's full-year profit grows

South Africa's Mr Price, a budget fashion and homeware retailer, yesterday reported a 6.7% rise in full-year earnings, but warned local supply chain challenges will add pressure in the short-term.

Retailers in South Africa are struggling to get products shipped into the country quickly to their stores and factories due to backlogs at local ports, owing to factors including under-investment in equipment and maintenance. Mr Price said the global and domestic supply chain disruptions "caused challenges to optimal inventory management", but it had leveraged its nimble supply chain model to minimise the disruptions experienced during the holiday period.

"Supply chain challenges in the form of port inefficiency and increasing shipping costs will add pressure in the short-term," the retailer said.

"However, the acquisition of port equipment by Transnet, which will take some time to become operational, is encouraging," it added, referring to the state-owned port operator.

Weak consumer environment

Against the backdrop of a weak consumer environment, as elevated inflation levels continued to impact its core customer base of low to middle-income households the most, Mr Price reported headline earnings per share of 1 286.2 South African cents for the 52 weeks ended 30 March.

Operating profit growth rose 7.9% to exceed R5 billion for the first time, the retailer said. It attributed the result to significantly improved sales momentum in the second half, after the first half was weighed down by power cuts that caused it to lose about R226 million in revenue as it lost trading hours.

Mr Price, which also sells sports clothing and equipment, reported better-than-expected revenue growth of 15.5% to R37.94 billion. Six analysts had expected revenue to rise to R37.02 billion, according to data from LSEG.

Retail sales grew by 16.2% to R36.6 billion, with comparable store sales inching up by 1.8%.

Mr Price said the later arrival of cold weather during this year's winter season resulted in subdued trade in the first two months of its new financial year, but sales growth recovered strongly in early June as temperatures dropped.

- Reuters


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