Woolworths misses estimates as SA sales slow

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WoolworthsRetail Independent Newspapers. .

Johannesburg - Woolworths, the South African food and clothing retailer which this year bought David Jones of Australia for $2 billion (R21 billion), reported earnings that missed analyst expectations as local clothing sales slowed.

Diluted earnings per share rose 9.5 percent to 3.63 rand in the 52 weeks ending June 29, the Cape Town-based retailer said today in a statement.

The estimate of five analysts surveyed by Bloomberg was 4 rand.

Sales gained 13 percent to 39.9 billion rand, compared with 23 percent growth in the previous fiscal year, which lasted 53 weeks.

South African clothing sales in comparable stores increased 8.6 percent, compared with a 9.3 percent rise in fiscal 2013.

South African retailers are struggling as high unemployment and inflation force shoppers to cut down on purchases.

Retail sales were unchanged in June, the worst performance since December 2009.

The South African Reserve Bank raised its benchmark interest rate for the second time this year on July 17, cutting disposable income for borrowers.

Woolworths, which sells international brands such as Country Road clothing in South Africa and organic, free-range and specialty foods, completed the purchase of Australia’s oldest department store this month in an effort to create a southern-hemisphere retail giant. - Bloomberg News

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