The Foschini Group (TFG) achieved a record turnover in the half-year through September 2023, but headline earnings per share declined by over 15%.
TFG released its results for the half-year ended 30 September 2023 today, which revealed a relatively strong performance from the retailer despite tough trading conditions and a comparatively high base for the previous year.
The company said its performance was impacted by challenging trading conditions in all three territories, marked by rising interest rates and high inflation.
In South Africa specifically, taxi strikes and flooding in the Western Cape, as well as sustained levels of load-shedding.
Despite these conditions, TFG’s retail turnover grew by 12.4% to R26.4 billion, supported by the continued expansion of the retailer’s footprint and brand portfolio and further growth in online retail turnover in South Africa.
Online retail turnover increased by 23.9% and now contributes 9.8% to total retail turnover.
The strong trade during the current period, along with a continued focus on resetting the cost base, enabled growth of 0.8% in operating profit before finance costs.
The retailer increased gross profit by 7.7% to R12.5 billion despite having had to deal with increased inventory purchased for growth in all territories and consequent increased promotional activity.
However, basic earnings per ordinary share and headline earnings per ordinary share decreased by 16.2% and 15.3%, respectively.
“Further, due to the continued consumer pressure, especially in Africa, the group chose to absorb cost inflation and undertook additional promotional activity to successfully manage inventory and increase market share gains,” the company said.
“The focus on cost control initiatives and the reduction of the cost base continued during the current period, with savings realised across a number of ongoing business optimisation projects.”
Consequently, trading expenses as a percentage of retail turnover improved to 41.9% from 42.3% in the prior period.
TFG declared an interim dividend of 150 cents per share has been declared which is down from 170 cents per share in 2022.