massmart Walmart costs to subdue earnings

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Massmart would post lower earnings for the 26 weeks to December 23 due to costs related to the deal in which Walmart bought a 51 percent stake in the business, the retail group told shareholders yesterday. Headline earnings were expected to be down by as much as 25 percent, with headline earnings a share seen to be within a range of R3.12 to R3.41, compared with R4.16 a year earlier. The company said costs primarily related to integration and an increase of R140 million to the supplier development fund following the Competition Appeal Court’s ruling that increased the fund to R240m. Excluding these costs and foreign exchange effects, headline earnings were expected to rise by between 2 percent and 9 percent. The stock rose 1.83 percent to close at R189.26 yesterday. – Staff reporter

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