Massmart's profit hit by muted consumer spending
JOHANNESBURG - South African retailer Massmart Holdings reported a drop in half-year profits on Thursday due to restructuring costs and weak consumer spending.
The company, part of Walmart Inc, had direct costs of 110 million rand ($8 million) related to the restructuring of some components of its wholesale and discount businesses.
Headline earnings per share before restructuring costs were 133 cents per share, a 20 percent fall from 169 cents per share in the same period a year earlier.
Headline EPS is the most widely watched profit gauge in South Africa and strips out certain one-off and non-trading items.
Sales decreased by 2.2 percent to 42 billion rand despite a fall in the costs of durable goods as consumers limited spending to priority items such as food in light of increased financial pressures, Massmart said in a statement.
South African retailers have struggled to lift earnings as elevated household debts, higher fuel prices and an increase in value-added tax squeeze consumer income.