Major South African retailer takes pain in the UK and Australia

The Foschini Group (TFG) expects to report a significant decline in earnings for its 2026 financial year, as the retailer’s Australian and UK operations continue to struggle.

This is despite a strong performance in its African operations, which have seen a significant boost from online sales through the group’s e-commerce platform, Bash.

TFG released a trading update on Friday, 20 March, for the 50 weeks ended 14 March 2026, outlining its year-to-date performance.

The retailer reported that, in its TFG Africa segment, sales in the year to date grew by 5.2%, supported by online sales and value-added revenues.

It added that this division’s gross margin has also now normalised since January. However, the retailer warned that this has been insufficient to recover the margin lost during the year up to and including peak season in the third quarter of its 2026 financial year.

On 3 February 2026, TFG informed shareholders that its gross margin decreased significantly due to clearance activity necessitated by South Africa’s challenging trading environment. 

The retailer explained that South Africa’s challenging consumer environment was characterised by constrained spending despite moderating inflation and lower interest rates.

For its UK division, TFG reported year-to-date sales growth of 31% in British pound terms. However, when excluding its White Stuff business, which was acquired in October 2024, sales grew by a more meagre 0.4%.

In Australia, TFG actually recorded a sales decline of 1.4% in Australian dollar terms, saying sales were flat in the fourth quarter of its 2026 financial year.

Overall, TFG warned shareholders that its earnings and headline earnings are expected to drop by over 20%.

The retailer explained that geopolitical uncertainty is expected to contribute to elevated input costs and cautious consumer behaviour. 

“The group’s diversification and local manufacturing capability within its TFG Africa division provides some resilience, with management actions focused on cost discipline and operational efficiencies to mitigate these headwinds where possible,” the company said.

“The group maintains a sound balance sheet position, supported by committed banking facilities and prudent working capital management.” 

The retailer noted that inventory in its largest division, TFG Africa, is expected to close within normal levels.

TFG’s annual results for the 2026 financial year are expected to be released on or about 5 June 2026.