Mr Price outperforms market with 5.9% December sales growth

Mr Price Group's 5.9% sales growth in December, the busiest trading period for South African retailers due to the holiday period, was ahead of the market's growth of 3%, the value clothing and homeware retailer said on Wednesday.

In a sales update for the 13 weeks to December 27, group retail sales increased by 3.6% to R15.1 billion. The directors said during the period, the group had maintained market share and gained further market share in its core market of South Africa,including in December,, as its retail sales increased ahead of the market's growth of 1.6% per the Retailers' Liaison Committee (RLC).

"The base effects in the quarter were mainly driven by withdrawals from retirement savings (from) the two-pot retirement system. While interest rates and inflation have declined, the discretionary retail consumer environment throughout most of 2025 remained muted as disposable income growth continued to be absorbed by high household debt servicing costs and the diversionary spend into online betting and other categories," the group's directors said in a statement.

Mr Price's share price fell 0.58% to R170.77 on the JSE Wednesday morning, a price already 33.3% lower than R256.36 a year ago.

Group retail sales for the first 7 weeks of the group's second half had increased 3.3%. Retail sales in October increased 1.8%, ahead of the market's growth of 1.3% (RLC). Sales growth then improved into the first two weeks of November, but slowed in the remaining two weeks of the month, closing with growth of 1.1%, slightly ahead of the market's growth of 1% (RLC).

Sales grew 3.8% in the last 6 weeks of the quarter (compared with 12.3% growth in the same period last year), supported by sales growth of 5.9% in December (12.8%).

Group GP (gross profit) margin decreased 20 basis percentage point, however the group anticipated that the margin for the full year to end-March 2026 would at least be in line with 2025 levels.

"Management is comfortable with both the current cash position and the shape of stock heading into the fourth quarter. Adequate plans have been made to achieve targeted closing inventory levels at the end of the financial year."

Retail sales for the corporate-owned apparel stores increased by 3.2% and contributed 83.1% to group sales, homeware store sales increased 4.5%, making up 14% of group sales, while telecom segment sales increased 11% for 2.9% of group sales.

Group retail sales grew 3.6% to R15.1bn and comparable store sales increased 0.5%. South African retail sales grew 3.9% to R14.1bn while non-South African corporate-owned store sales increased 0.6% to R1bn.Total store sales increased 3.6%, while online sales increased 3.5%.

Online sales accelerated in December to 8.3%. Retail selling price inflation was 5.2%, and total unit sales decreased 1.5% to 109 million.

The group store footprint expanded to 3 164, increasing by a net 64 stores. Cash sales, which constitute 90.9% of total retail sales, increased 3.7% while credit sales increased 2.9% as the group continued to manage its credit granting prudently.

Retail sales in the Apparel segment grew 3.2% during the quarter while comparable store sales increased 0.4%.The three largest apparel divisions, Mr Price Apparel, Studio 88 and Power Fashion sales' growth all outperformed the market (RLC), the directors said.

In December, retail sales for the Apparel segment were up 6% (13.2%) and the segment achieved its highest market share level on record in December. Studio 88 reported 7.7% growth (12.3%), and delivered strong December sales growth of 12.3% (14%).

The Homeware segment saw a decline in market share of 100bps, but all homeware divisions grew GP margins. Yuppiechef's strong performance continued, growing sales by 10.1% (26.5%). The Telecoms segment increased retail sales by 11% outperforming the comparable market. The segment grew its GP margin and continued to expand its profitability.

Other income increased 1.9% to R320m due to lower debtors' interest and fees from the group's retail debtors' book, as the repo rate decreased 100bps.

The director's said indications were that the economic growth outlook for 2025 was improving. Growth was expected to be supported by low and stable inflation, further interest rate cuts, positive effects from the strong commodity cycle and continued currency strength against the dollar.

However, the international political and economic environments were uncertain and could hold risk for South Africa's improving prospects.

"In the first four weeks of January, the group delivered solid sales growth of 4.2% against a high base of 16%. Management continues to be focused on stock management, free cash-flow generation and sustainable margin expansion."

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