Lewis Group share price surges on strong trading update
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JOHANNESBURG - THE LEWIS Group share price rose more than 9 percent on the JSE yesterday morning after the retailer released a strong trading update for the third quarter to end December, with sales up by 16.6 percent.
Lewis owns brands such as Lewis, Best Home and Electric, Beares and United Furniture Outlets.
The group said its comparable stores grew sales by 15 percent for the quarter, and by 2.4 percent for the nine months to end December.
“The strong customer demand experienced by Lewis Group since the reopening of its stores at the beginning of June after the hard lockdown continued for the balance of 2020, with the group delivering a robust trading performance in the third quarter to December,” Lewis said.
Lewis achieved the 16.6 percent sales growth despite the ongoing pressure on consumer spending from the pandemic and lockdown restrictions.
It lost about R350 million in merchandise sales and R250m in customer account collections due to the lockdown last year.
The group added that excluding the lockdown months of April and May, when stores were closed, sales grew by 18.3 percent and the sales growth was supported by another impressive Black Friday performance.
Its cash sales for the quarter grew by 35.9 percent while credit sales rose by 2 percent. Merchandise sales for the nine months to end December were only up by 4 percent.
The share price leapt to R26.20 yesterday morning, up from Tuesday’s closing price of R24 after the release of the update. It later closed at R25.20.
The group delivered strong results for the six months to end September, with operating profit up by 13.6 percent and earnings up by 9.9 percent.
Other revenue, comprising finance charges and initiation fees, insurance premiums and fees for services rendered, rose by 2.8 percent for the quarter and by 2.7 percent for the nine months. Its total revenue, comprising merchandise sales and other revenue, increased by 11.5 percent for the quarter and 3.5 percent for the nine months.
The group said the recovery in the collection performance reported in the half-year results to end September continued, with the collection rates and debtors’ book showing steady improvement.
“Collections averaged 75.6 percent for the third quarter compared to 72.1 percent in the same quarter last year and 69.5 percent for the nine months compared to 77 percent last year.”
It managed to contain growth in debtor costs to 5.1 percent for the quarter, resulting in an increase of 19.5 percent for the nine months.
African News Agency