Clicks kissed R1.99 billion goodbye in one day after setting R50 billion turnover record

Clicks’ share price plummeted on 22 October after it released its results for the 2026 financial year.

Despite reporting a record R50 billion in turnover, the retailer’s share price dropped by 3.56%, resulting in a R1.99 billion drop in its market capitalisation.

Analysts attribute this drop to a tough consumer environment and increased competition, which made Clicks miss investor expectations.

On Thursday, 22 October, Clicks reported that its turnover grew by 5.4% to R50.41 billion, marking the first time in the retailer’s history that it has surpassed R50 billion.

Its earnings per share were up 4.2% to 1,419.8 cents, while headline earnings per share (HEPS) grew 4.4% to 1,421.7 cents. The retailer’s profit for the year was up 2.6% to R3.32 billion.

Operationally, Clicks also expanded, with its physical footprint growing by 41 stores and 60 pharmacies.

The retailer now has 1,110 stores and 840 pharmacies across its operating markets, growing closer to its medium-term goal of 1,200 stores.

In its results presentation, Clicks explained that the backdrop to these results was an “extremely tough and competitive” consumer environment.

The retailer expects this to continue, saying in its outlook that local consumers will remain “severely constrained” as fuel costs remain elevated and interest rates are higher.

Despite reporting record turnover, Clicks’ share price fell by as much as 6% on Thursday, ending the day 3.56% weaker than its close on Wednesday.

This one-day drop extended Clicks’ year-to-date share price decline, with the retailer down 32.67% at the time of writing.

This means that Clicks’ market capitalisation has fallen from R76.91 billion at the start of the year to R52.08 billion on 22 October. This signifies a R24.83 billion decline in market cap.

At the time of writing on 23 October, Clicks’ share price has continued to decline, with the stock now trading at R224.93.

Analyst opinion

All Weather Capital equity analyst Jared Hoover told BusinessDayTV that the market’s reaction to Clicks’ results was more focused on the retailer’s second-half performance.

“If we looked at that across revenue, across diluted HEPS growth, dividend per share growth, it probably was a miss relative to market expectations, in the region of a 2% to 4% miss,” Hoover said.

He attributed this miss to Clicks’ low selling price inflation, which was impacted by the tough consumer environment.

“You’ve also got a tough environment amongst the pharmacy groups where there’s competitive pricing and more investment in pricing and competitive discounting as well,” he said.

Clicks reported internal selling price inflation of 1.2% for the second half of the 2026 financial year, averaging 1.5% for the year.

PSG Hole in One Ruimsig wealth manager Ricus Reeders agreed with Hoover, adding that Clicks is likely losing market share to its main competitor, Dis-Chem, in this constrained environment.

He also pointed out that Clicks has a historically high price-to-earnings ratio, which makes its margin squeeze concerning.

“There are only three ways you can improve cash flow: debtors/creditors book, revenue, and margins,” he said.

In Clicks’ case, its revenue was up by 5.8%, but its trading margin declined by 10 basis points to 9.7%.

“At a historic 17 price-to-earnings, and considering the trend of the company’s performance over the past 12 months, 18 months, two years, I still don’t think it’s a bargain at current prices,” Reeders said.

He noted that consumer stocks across the board find themselves in a difficult position currently, as South African consumers remain under pressure.

While there have been improvements in South Africa’s fiscal health, the benefits have yet to reach consumers.

“Until such time as both the local economy and what’s happening in worldwide economies are moving in the same direction, I think they will remain under pressure,” Reeders said.