The Foschini Group’s retail turnover grew a robust 16.3 percent in its first quarter of the 2023 financial year against the high base of the same period last year that had benefited from the Covid-19 pandemic recovery.
The share price increased sharply by 5.45 percent to R124.62 yesterday afternoon, indicating shareholders were favourably disposed to the quarterly results that were released yesterday morning.
Strong growth in clothing and homeware saw TFG Africa perform ahead of expectations, with retail turnover growth of 11.2 percent in the quarter.
Clothing was up 13.1 percent and homeware sales increased 17.4 percent.
TFG Australia continued to perform well, with retail turnover growth of 15.7 percent.
TFG London also continued its strong performance with retail turnover growth of 39.9 percent.
Online retail turnover grew 13.2 percent through the quarter, contributing 9.7 percent (10.2 percent) to total group retail turnover.
Headwinds in the trading environment included lost trading hours due to load shedding, the impact of the non-payment of the Covid-19 social relief of distress grant, the weakening exchange rate, and increased inflationary pressure.
In the UK, inflation was at the highest levels since the early 1980s and was expected to breach double digit levels by the end of the calendar year.
While a recovery from the Covid-19 pandemic continued in Australia, increasing fuel and housing costs had started to drive up consumer prices.
TFG Africa lost a further 33 000 trading hours during the quarter due to load shedding across all provinces in South Africa.
This represented a 13.2 percent increase on lost trading hours in the same period in the previous financial year.
In TFG Africa, all merchandise categories, except cellphones – which were impacted by continued supply shortages – grew retail turnover during the first quarter.
The group said it expected the consumer to remain under pressure.
Management would focus on further improving gross profit margins during the second half, expense control, working capital management and disciplined capital allocation, while investment in growth would continue.
Trade since the end of the quarter had been encouraging across all trading territories, the group said.
On March 7 the group announced the planned acquisition of Tapestry Home Brands for R2.35 billion. The group said yesterday that the transaction had gone unconditional and was envisaged to be implemented from August 1, 2022.