Johannesburg - Massmart shares fell the most in a year after the South African food and goods wholesaler, owned by Wal-Mart Stores, said first-half earnings declined as much as 29 percent.
The stock slid as much as 8.4 percent, the most on an intraday basis since August 14, 2013, and traded 6.5 percent lower at 137.09 rand as of 11:11 am in Johannesburg.
About 576,000 shares traded, or almost twice the three-month daily average.
Massmart earnings per share excluding one-time items were 1.59 rand to 1.78 rand in the 26 weeks to June 29, compared with 2.25 rand the previous year, the Johannesburg-based company said in a statement today.
It didn’t give a reason for the decrease.
However, the decline highlights the squeeze felt by cash-strapped consumers who are struggling with the rising cost of living in Africa's most developed economy.
The company will report results on August 28.
South African retailers are struggling as high unemployment and rising inflation forces shoppers to cut down on major purchases.
Retail sales were unchanged in June, with inflation at 6.6 percent.
The South African Reserve Bank raised its benchmark interest rate for the second time this year on July 17, cutting disposable income for borrowers.
Massmart’s statement comes a day after Shoprite, South Africa’s biggest food retailer, reported earnings that missed analyst expectations and said it’s shifting its investment focus to the rest of Africa as sales in its home market slow.
On Tuesday, Shoprite reported its slowest profit growth in 15 years for the year to June.
Shoprite dropped 2.8 percent today after a 5.6 percent slump yesterday. - Bloomberg and Reuters