SHOPRIT: 12,637 -212 (-1.65%)
Budget retailer Mr Price shares tumble 11% after poor sales
JOHANNESBURG, Aug 22 (Reuters) - Shares in South African
budget clothing and furniture retailer Mr Price tumbled
on Thursday after the firm reported a slowdown in sales in the
first four months of its financial year, citing a slow economy
and squeezed consumer.
The retailer's shares fell 11% to 156.21 rand after it
posted a 2.5% drop in comparable store sales for the four months
to Aug. 3.
Mr Price, known for its no-frills clothing and furniture,
said earlier this year that it was anticipating a tough first
half of the year but expected an improvement in the second half.
Analysts said the results were disappointing, even taking
into account the company's earlier warning.
"The market was expecting a better number. ..the numbers were
poor," said Ryan Woods, a trader at Independent securities.
"The retail environment; there just isn't sufficient
disposable income to help drive sales. ..the consumer industry
is under a lot of pressure and like all retailers, they're
feeling it," Woods said.
Retailers in South Africa are struggling to boost sales
growth as a slowing economy, high unemployment and rising fuel
costs reduce consumers' spending power.
South African retailer Shoprite earlier this week
missed their full-year earning forecast.
Mr Price, which said early signs from spring and summer
sales showed performance was improving, reported 7.5 billion
rand ($491.97 million) of retail sales and other income in the
four months to Aug. 3, 1.1% up on the same period a year
"Looking ahead, the trading environment is expected to be
challenging as global markets remain uncertain and local
economic growth is forecast to be muted in 2019," it said.
The Durban-based company, which withdrew from Australia
earlier this year due to low returns, has said it expects to
open 70 new stores this financial year.
($1 = 15.2448 rand)
(Reporting by Onke Ngcuka; Editing by Kirsten Donovan)
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