JOHANNESBURG – Shoprite looked set for its biggest fall in almost 20 years on Wednesday after it warned of a steep drop in half-year headline earnings citing foreign exchange setbacks and other factors.
Shoprite in a trading statement released after the market close on Tuesday said it expected headline earnings a share including an adjustment for hyperinflation to fall by as much as 26 percent to 388.6 to 441.1 cents for the 26 weeks to December.
It reported headline earnings a share of 525.6 cents in the prior comparable period.
Excluding the hyperinflation adjustment, headline earnings a share is expected to fall to 334.9-387.4 cents, the company said.
“The low turnover growth resulting from low food inflation, temporary stock availability challenges and currency devaluations combined with lower non-RSA (non-South Africa) gross margins and inflexible expense growth have adversely affected profitability,” Shoprite said in its trading statement.