Truworths interim sales grow well in the UK, but fall in South Africa

Shoppers pass the entrance to a Truworths Man retail store in the Sandton, Johannesburg in this file photo. Picture: Nadine Hutton/ Bloomberg

Shoppers pass the entrance to a Truworths Man retail store in the Sandton, Johannesburg in this file photo. Picture: Nadine Hutton/ Bloomberg

Published Jan 30, 2024


Truworths International, the UK and South Africa clothing retailer, said yesterday that headline earnings per share (Heps) were expected to increase between 0% and 4%, after strong UK sales offset falling sales in South Africa in the 26 weeks to December 31.

Group sales increased 8.2% to R12.2 billion in the 26 weeks compared with the same period a year before, when sales were particularly high, off the back of pent-up demand from the Covid pandemic.

Heps were expected to be between 495 and 515 cents from 494.6c. The interim results are expected to be published on February 29.

Retail sales growth for Truworths Africa, which comprises mainly the South African businesses, fell 0.3% to R8.4bn.

Office in the UK grew sales 15.6% to £162 million (R39m).

Account sales comprised 48% (Dec-2022: 52%) of group retail sales, with account sales unchanged and cash sales increasing by 17%.

Directors said the sales performance competed against a high base in the prior period, which had recorded retail sales growth of 13.4% relative to the previous 26-week period.

The impact of the high base was especially pronounced in the last three months of the current six-month period. Retail sales were impacted by poor economic conditions and high interest rates, leading to reduced disposable income and declining consumer confidence.

Credit extension fell as scorecards reacted to the deteriorating credit health of the South African consumer, weighing negatively on credit sales.

Port congestion challenges in South Africa resulted in lower than expected merchandise deliveries for December.

Retail sales for the last nine weeks to December 31 decreased by 1.6% to R4bn compared with the last nine weeks to January 1, 2023.

Online sales continued to grow well, increasing by 41% and contributing 4.2% to Truworths Africa’s retail sales.

Truworths Africa’s gross trade receivables increased by 1.6% to R7.2bn and the number of active accounts increased 4.6% to 2.9 million.

Active account holders able to purchase and overdue balances to gross trade receivables were at 83% (Dec-2022: 84%) and 12% (Dec-2022: 11%), respectively.

Truworths Africa’s like-for-like store retail sales fell 3.3%. Trading space increased 0.9% and was expected to increase by about 1% for the 2024 financial period.

Product (retail selling price) inflation averaged 8.4% (13.3%).

Retail sales for the group's UK-based Office segment increased by 15.6% to £162m relative to the prior period’s £140m. In rand terms, retail sales for Office increased by 33.1% to R3.8bn.

Office continued to benefit from its “unique market positioning, brand partnerships and strong online presence”, the group said.

Online sales contributed about 47% of Office’s retail sales, increasing from 44% in the prior period.

Retail sales for the last nine weeks increased by 11.6% to £71m. Office’s trading space decreased by 2.8% and is expected to increase by about 12% for the 2024 financial period as the business starts to invest in new stores and existing store renovation.