The shop-front of a Truworths store in Johannesburg. The group has been struggling to grow retail sales and reported on 2.8% retail sales growth in the 18 weeks to November 3, 2024. Picture: Karen Sandison / Independent Newspapers
Truworths International’s share price fell 5.6% yesterday afternoon after it reported a modest 2.8% increase in group retail sales for its first 18 weeks of its 2025 financial year trading to November 3.
Group retail sales for the first 18 weeks increased to R7.2 billion compared to the same period in 2023. Truworths Africa increased by only 0.2% to R4.7bn, while Office UK showed stronger performance with a 9.7% increase to £106.9 million (R2.4bn).
The share price yesterday afternoon stood at R103.50, which nevertheless represented a 32.2% rise in price over 12 months.
Directors said that while business and consumer sentiment in South Africa had improved, trading conditions remained challenging as optimism from the formation of the Government of National Unity and other factors had not yet translated into meaningful improvements in consumer disposable incomes.
The prospect of higher economic growth, lower inflation, stabilising cost of living and lower interest rates were expected to support consumer spending in the year ahead.
However, the timing and extent of the impact thereof remained uncertain at this stage, the group directors said.
Retail sales in the Truworths Africa segment increased by 0.2% relative to the prior period. Online sales continued to show good growth, increasing by 38% and contributing 6.4% to the segment's total retail sales.
Strict credit-granting criteria continued to be applied. At the end of the first quarter, Truworths Africa’s active trade receivables were 1.1% higher at R6.3bn.
Excluding accounts that were over 210 days in arrears, active account holders able to purchase and overdue balances to gross trade receivables were unchanged relative to the first quarter of 2024, at 82% and 14%, respectively.
In the UK, general trading conditions remained suppressed as consumers continued to adopt a cautious approach to spending.
Despite this, Office UK proved resilient, recording retail sales growth of 9.7% in pound sterling. In rand terms, retail sales increased 8.1% to R2.5bn. Online sales increased 3.2% and comprised 42.9% of total retail sales.
Trading space in the Office UK segment was expected to increase by approximately 10% for the 2025 financial period. Results for the 26-week period ending December 29, 2024, were scheduled to be released on February 27, 2025.
BUSINESS REPORT