JOHANNESBURG - The Lewis Group share price surged by nearly 8 percent yesterday after the multi-brand furniture and appliances retailer defied constrained consumer spending by reporting a 6.6 percent increase in merchandise sales in the nine months to end December.
Lewis, which owns brands such as Best Home and Electric, United Furniture Outlet (UFO), Inspire and Beares, said sales were boosted by the Black Friday performance as well as its strategy of diversifying across target markets and sales channels, which continued to offer resilience in the constrained consumer spending climate. The share price responded positively to the trading update and surged to R31.99 a share at 3.13 pm, before closing at R30.55.
Lewis performed better in the quarter, with merchandise sales up by 6.9 percent to end December.
“Merchandise sales increased by 6.9 percent for the third quarter to December, supported by a robust Black Friday performance. Comparable stores grew sales by 5.6 percent for the quarter and 4 percent for the nine months,” the group said.
The group said other revenue, which consists of finance charges and initiation fees, insurance premiums and services rendered, increased by 5.2 percent for the quarter and by 5.6 percent for the nine months.
Total revenue, consisting of merchandise sales and other revenue, increased by 6.3 percent for the quarter and 6.2percent for the nine months.
“Debtor costs continued to show an improving trend, supported by strong collections and an improvement in collection rates, reducing by 0.8 percent for the quarter and 0.6percent for the nine months,” the group said.