Surprisingly good news about Pick n Pay

Pick n Pay no longer expects its headline loss per share to increase by more than 20%, thanks to a better-than-expected 2026 financial year performance from Boxer, in which it holds a 54% stake. 

Instead, the struggling retailer expects its headline loss per share to narrow compared to the previous financial year. 

This was revealed in a trading statement released on the JSE news service late on 21 May, in which Pick n Pay explained the sharp improvement in its expected financial performance. 

On 9 February, Pick n Pay released a preliminary trading statement for its 2026 financial year, where it said it expected its headline loss per share to widen by more than 20%. 

This would see the company’s headline loss per share grow from -61.54 cents in the 2025 financial year to around -84 cents in 2026. 

However, in a more recent trading statement released after Boxer reported strong results for its 2026 financial year, Pick n Pay said it now expects its headline loss per share to narrow significantly.

“Shareholders are advised that the Group no longer expects to report an increased headline loss per share in FY26 versus FY25,” Pick n Pay said. 

This is on the back of the following developments –

• An above-expectation FY26 result from Boxer, as published on 11 May 2026.
• Better-than-expected trading and margin management within the Pick n Pay segment in the last month of FY26. 
• The small size of the FY25 earnings base, which means that even moderate changes in FY26 absolute earnings can have an outsized effect on the FY26 earnings growth rate.

Despite this, Pick n Pay stores themselves continue to struggle, with it expecting an FY26 trading loss after lease interest for the Pick n Pay segment of between R2 billion and R2.1 billion.

This is compared with a reported FY25 loss of R1.7 billion. 

Overall, the stronger-than-expected performance from Boxer and better trading from Pick n Pay stores in the last month of the 2026 financial year means the retailer’s financial performance has been enhanced. 

It expects its headline loss per share to improve by between 10% and 20% when compared to the 9 February trading statement. 

This means it will narrow from the -61.54 cents per share reported in 2025 to between -55.39 cents and -49.23 cents. 

The expected improvements relative to the 9 February trading statement and the 2025 financial performance can be seen in the table below. 

Leaning on Boxer

Pick n Pay is not only increasingly leaning on Boxer to boost its financial performance, but has also recently sold a significant chunk of its stake in the retailer to fund its own turnaround.

On 18 May, Pick n Pay announced plans to raise R4.7 billion for its turnaround efforts by selling a 11.5% stake in Boxer through an accelerated bookbuild.

The completion of this bookbuild process means that Pick n Pay’s stake in Boxer has fallen from 64.5% to around 53%.

In announcing the bookbuild, Pick n Pay said it has made strong progress on multiple parts of its turnaround plan over the last two years.

“The product offering has been enhanced, execution of in-store retail principles has been improved, and the quality of the store estate has been upgraded,” it said.

Pick n Pay added that a new logistics agreement is set to deliver efficiencies over the coming years.

“These factors have driven improved like-for-like sales growth in Pick n Pay company-owned supermarkets,” it said.

Alongside improved gross margins, the retailer is confident that these interventions will deliver further benefits.

Pick n Pay is currently engaged in ongoing consultations with its labour partners to improve store operating efficiencies and costs.

It has explained that this is necessary to make its cost structure more competitive with its peers and more suited to the demands of modern shoppers.

Pick n Pay will deploy the R4.7 billion it gets from selling part of its Boxer stake to support the ongoing implementation of its turnaround plan and growth strategy.

It added that the money will also help Pick n Pay to achieve the maximum financial flexibility over the medium term.

“This will enable the Group to continue executing on its strategic priorities, investing ahead of the plan,” it said.

It added that there was a clear pathway to returning the core Pick n Pay Stores segment to cashflow break-even.

Otto1890 senior equity analyst Alec Abraham told Daily Investor that Pick n Pay’s sale of more of its Boxer stake indicates that the turnaround is proving more difficult than expected.

Abraham said the company may be struggling with deeper-seated issues than initially expected.

This, he said, can be seen in the fact that Pick n Pay’s management has already pushed out guidance on the break-even date.

However, Abrahams does not expect Pick n Pay to sell down its stake below 50% in Boxer as this will impact the parent company’s financial performance.

Were Pick n Pay to sell down its stake in Boxer below 50%, this would mean it would no longer be able to consolidate the accounts, “and the stand-alone Pick n Pay accounts will look just awful”.