Top South African retailer ‘smashed while management put their heads in the sand’

TFG’s latest trading update substantiated a top asset manager’s view that the management team have their heads in the sand regarding the company’s situation.

Over the last year, the TFG management team has engaged with investors, telling them that all was well at the company.

During TFG’s Capital Markets Day in August 2025, chief executive Anthony Thunström and his management team painted a rosy picture.

Thunström told investors that TFG has done much of the heavy lifting, that its strategy is working, and that it will outperform the market.

TFG CFO Ralph Buddle told investors that they were on track to achieve a 5-year compound annual growth rate (CAGR) of 12.5%.

Investors expected a lot from the retailer, which did not deliver. The fashion retailer’s trading update for the six months ended 30 September 2025 disappointed.

The TFG share price plummeted 16.64% in a single day following the trading update, underscoring the mismatch between the company’s promises and what it delivered.

Shane Watkins, Chief Investment Officer at All Weather Capital, explained that the sharp share price decline was not due to a poor trading statement.

Instead, it was ‘unexpectedly bad,’ considering what TFG and its chief executive told the market shortly before these results.

The TFG management team has recently engaged with large groups of institutional investors at their capital markets day and at a global bank’s conference.

“During these engagements, the TFG management team did not communicate the extent of the bad results they announced in their trading statement,” he said.

This means the market was surprised by the TFG trading update, causing many investors to dump the stock.

Top asset manager slates TFG and its management team

The TFG management team maintained a positive outlook, often pointing to external factors rather than internal strategy or execution for disappointing results.

Daily Investor saw an internal note from one of South Africa’s top asset managers which slated the TFG management team.

The note said that they engaged with TFG in a group setting, which included the chief executive, financial director, and head of retail.

“It was a jarring experience. The management team barely acknowledges that they just put out another profit warning,” it said.

“They try to paint everything in the most positive of lights and blame poor performance on external uncontrollable factors. You would think their business is flying.”

“I’m not sure whether they’re delusional and believe things genuinely aren’t that bad or merely trying to convince the market that things will be okay. Neither is good,” it said.

The internal note stated that the share price has been smashed and that the company looks optically cheap.

The writer argued that TFG must be a candidate for a short, especially if the management team has its head in the sand.

Many investors seem to share the asset manager’s view, as the TFG share price declined by 48% over the last year.

Trading update from TFG

On Friday, 8 May 2026, after the market closed, TFG published a trading update and an updated trading statement for the year ended 31 March 2026.

It once again focused on external factors. “Trading conditions in South Africa remain challenging, with consumer spending still constrained,” it said.

“Heightened geopolitical tensions in the Middle East have continued to contribute to an uncertain global environment.”

In the 2026 financial year, the TFG Group’s sales grew 7.1%. Excluding White Stuff, which it acquired recently, group sales grew 2.8%.

It warned investors that earnings per share (EPS) are expected to decline by 65% to 55%, and headline earnings per share (HEPS) by 40% to 30%.

TFG’s EPS and HEPS were significantly worse than expected. It was described as a ‘massive miss’ by one analyst.

These results substantiated the bearish outlook from the top asset manager’s internal note and investors’ decision to dump the stock.

TFG’s financial results for the year ended 31 March 2026 are expected to be announced on SENS on or about Friday, 5 June 2026.

TFG share price