Truworths International: Shares slide on lower annual revenue

Truworths International, South Africa’s third-largest clothing retailer by market value, fell to the lowest in four months as sales growth slowed amid rising inflation and unemployment. Revenue for the 52 weeks to June 29 rose 6.8 percent to R10.8 billion, compared with an 11 percent increase a year earlier, the company said on Friday. Credit sales, or purchases funded by loans from the company, rose 5 percent compared with growth of 9 percent in fiscal 2013. “There’s been a bigger rejection rate on credit granting at the same time as Truworths is losing sales to international retailers and there is general pressure on South African consumers,” said Alec Abraham, an analyst at Sasfin Securities. Consumers have been struggling because of unemployment of more than 25 percent and inflation that has increased to 6.6 percent. The Reserve Bank raised its benchmark interest rate by a quarter of a percentage point on Thursday, increasing the pressure on borrowers and bond holders. Truworths’ shares slid 3.6 percent to close at R72, the lowest since March 20. The stock has declined 6.2 percent this year, compared with an 8.9 percent increase on the FTSE/JSE Africa General Retailers index. –Bloomberg