The Foschini Group (TFG) grew sales by 4.5% in the third quarter to December 30 over the same quarter a year before in challenging trading conditions in all the regions where it operates.
Group turnover growth for the nine months to the same date was 9%, a trading update said yesterday. The group predicted trading conditions and consumer confidence were likely to remain under pressure, exacerbated by higher interest rates and inflation, as well as continued load shedding and port delays in South Africa.
TFG investors appeared cheered with the update, as the share price was trading 4.1% higher at R101.98 yesterday afternoon, while the Top 40 index was up by only 1.48% at the same time.
In South Africa, turnover was hit by a softer Black Friday period, with Stage 6 load shedding over that weekend. Festive season trade delivered “pleasing results”, however, with core merchandise categories achieving strong growth for December 2023, the group said.
TFG Africa turnover grew 5.1% in the third quarter, with like-for-like growth of 0.7%. Turnover for December was up a much higher 11.8% and like-for-like growth was 6.1%.
TFG Africa's quarterly cash turnover was 6.6% – cash turnover comprises 75.8% of TFG Africa turnover and 82.4% of group turnover.
By category, clothing turnover in TFG Africa was up 6.4% in the third quarter, 0.9% higher in homeware, 3.45% higher in cosmetics, 2.6% lower in jewellery, and cellphones turnover grew by 3.4%.
TFG London turnover declined 3% (GBP) in the quarter off a strong post-Covid-19 recovery base in the same quarter a year before.
TFG Australia quarter turnover fell 7.3% (AUD), also off a strong post-Covid-19 recovery base.
Group online turnover grew 29.2%, contributing 9.1% (7.4%) to total group turnover for the quarter. TFG Africa’s online turnover was up 44.8%.
Online turnover growth was driven by the consolidation of TFG Africa retail brands on the Bash platform, which the group said was ranked the number one South African fashion shopping app.
In South Africa, load shedding and delays at ports held back the planned flow of inventory. The impact of import delays was offset to an extent by the ability to increase volumes from local manufacturing capacity.
TFG London and TFG Australia’s performances were set against last year’s exceptionally strong post-Covid-19 recovery, while the effects of higher inflation and interest rates on consumers adversely impacted sales.
TFG Africa opened 42 new stores in the third quarter and 210 in the nine months, bringing the total number of stores to 3 663 as at December 30.
TFG Africa’s gross margin continued to recover from the impact of promotional activity in the first half of the 2024 financial year that had been required to clear excess stock due to the impact of load shedding.
Inventory levels fell 11.6% compared with December 2022 and 13.7% compared with the 2023 financial year end.
BUSINESS REPORT