Mr Price’s share price surged more than 8% yesterday morning after it said third-quarter retail sales growth was more than double the same period a year before and much higher than its competitors.
Retail sales of its value clothing, homeware and telecoms products increased 9.9% to R13.2 billion in the quarter, versus 4.1% sales growth over the same period a year before. The comparable market’s sales, measured by the Retailers’ Liaison Committee, grew 3.4%,
CEO Mark Blair said in an update yesterday: “We anticipated a shift in momentum once we successfully navigated the disruption of our ERP System change and the installation of load shedding back-up power facilities in all our stores.”
The share price was trading 7.3% higher at R172.35 cents yesterday afternoon, and ended the day at XXX.
The update from Mr Price also generated interest on X, with for instance, The Passive Income Guy (@hazelwood_dave) commenting: “Mr Price. Total sales up 10% vs like-for-like only up 4%. Difference explained by trading space up 7% (double the number of new stores that Foschini opened). Taking market share from retailers that are not expanding stores at same pace?”
Wayne McCurrie, a portfolio manager at Ashburton Investment (@WayneMcCurrie) said: “…Very good. Apparel did extremely well. Home was disappointing, but a small part of business. Good volume sales. Market should like this. Let’s see what happens.”
Marco Olevano (@MarcoOlevano) wrote: “Mr Price delivered a strong Q3 with market share gains across all segments. While the outlook remains cautious due to economic uncertainties, the company is well positioned with its core business momentum and successful integration of acquisitions.”
Blair said their trading performance had improved monthly, and was strong in December, with retail sales up 15.5%.
This growth was led by the flagship division Mr Price Apparel, and supported by strong sales growth from acquisitions. Group sales were also at a higher gross margin than last year.
“The quarter started slowly in October and improved into November. The total comparable market's retail sales grew 0.8% cumulatively in these two months while the group recorded growth of 5.3%,” said Blair.
Gross margins improved in each of its trading segments and in eight of the nine trading divisions during the period.
Third-quarter retail sales for the corporate-owned stores compared with the 2023 financial year was 11.7% for the retail segment, 0.9% for the home segment, 9% for the telecoms segment and 9.9% for the group.
Group retail sales grew 9.9% to R13.2bn and comparable store sales increased 4.1%.
South African retail sales grew 9.3% to R12.3bn while non-South African corporate-owned store sales increased 18.1% to R964m.
Total store sales increased 10.1% while online sales, which contributed 1.8% to retail sales, increased 2.9%, with strong 10.5% growth in December.
Group retail selling price (RSP) inflation of 4.9% was below consumer price inflation despite more full-price items being sold as fewer markdowns were actioned.
The store footprint increased by 85 new stores to 2 892 stores. Trading space increased 7.1% on a weighted average basis.
Mr Price Apparel had gained market share for five consecutive months. While sales growth was generally strong across all merchandise departments, the performance of kids was a standout, Blair said.
The acquired apparel businesses continued to perform ahead of the market. Power Fashion delivered double-digit sales growth. Studio 88 grew sales by high single digits.
The Home segment’s retail sales growth improved, with performances in Mr Price Home and Sheet Street increasing to mid-single-digit sales growth levels in December.
Yuppiechef continued to report double-digit sales growth. The telecoms segment grew retail sales 9%.
The group said the Durban port congestion was disruptive to festive season trade, and this situation was expected to continue until the core challenges were successfully remedied.
Currently the elevated level of risk has subsided slightly due to lower port demand post the festive season.
The instability of the Red Sea shipping route was increasing transit times. This had also resulted in increased shipping rates; however, the group’s rates were contracted until June.