Shoprite Sees Improved South Africa Trading After Earnings Fall

(Bloomberg) -- Shoprite Holdings Ltd. said improved trading at its South African stores wasn’t enough to prevent a decline in full-year earnings after a tough first half of the year.

• South African supermarket sales gained 9.4% in the three months through June, compared with 4.9% for the year as a whole. Adjusted earnings per share declined by 20%.

Key Insights

• The owner of chains including Checkers and U-Save saw improved sales in its home market after industrial action and complications related to a new IT system blighted the first half.
• South African retail sales rose for the sixth straight month in June, defying a persistently sluggish economy. Last month’s interest-rate cut by the central bank could give a further boost to consumers in the second half of the year.
• Shoprite’s business in the rest Africa continued to be loss-making, with “no foreseen respite in short-term,” the company said. However, the retailer is committed to its long-term strategy in the 14 countries outside South African in which it operates.

Market reaction

• The stock fell 1.5% TO 137.69 rand as of 9:15 a.m. in Johannesburg. The shares jumped 5.8% on July 30 after the retailer released a positive and detailed trading update.

Get More

• For more details on the news, click here
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To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Bowker

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