Why the market punished Boxer

Boxer’s share price was punished after it released its audited annual financial results for the 53 weeks ended 2 March 2025.

The retailer’s share price started the day at R68.10 but quickly declined after its results were released, ending the day at R64.95.

The share price decline continued on Tuesday, 13 May 2025. By the time of writing, it had declined by 3%, trading at R62.84.

It raises the question of why the Boxer share price was punished, given that it showed 13% revenue growth to R42.75 billion in the 2025 financial year.

Even when stripping out the fact that it has a 53-week reporting period instead of the previous 52 weeks, revenue growth was still 10.4%, much higher than food inflation.

It also continued its aggressive store rollout, adding 48 net new stores in the financial year, taking the total estate to 525 stores.

As part of this rollout, it completed 15 store conversions from Pick n Pay to Boxer, including 8 Superstores and 7 liquor stores.

“Boxer is particularly pleased with the sales uptick achieved in these stores post conversion to the Boxer banner,” it said.

However, one concern is cost. Its cost of merchandise sold rose by 12.86% to R33.29 billion, and trading expenses grew by 15.9% to R7.06 billion.

These rising costs led to a decline in Boxer’s profit, from R1.39 billion in 2024 to R1.38 billion in 2025.

The company’s basic earnings per share also fell, declining from 461.67 cents per share to 406.70 cents, a 12% drop.

The retailer pre-emptively warned that its weighted average number of ordinary shares for the 2026 financial year will increase by around 34% to fully account for the IPO share issue.

It explained that this would drag on its earnings in the 2026 financial year and likely lead to a year-on-year decline in headline earnings per share.

Analyst opinion on the Boxer share price decline

Alec Abraham, a senior equity analyst at Sasfin Bank, is one of South Africa’s top equity analysts and a foremost expert on the country’s retail sector.

Abraham told Daily Investor that the key driver of Boxer’s share price decline was likely its volume decline in the last seven weeks of the year.

He said the results showed that several aspects of Boxer’s operational execution and investment case remain intact, offering medium-term earnings upside.

“However, it is worth monitoring closely the volume progression, which is a key enabler for the group to realise its ambitious earnings goals,” he said.

Alex Duys from Umthombo Wealth said he likes Boxer’s long-term investment case. However, it may experience slower earnings growth in the short term.

Duys said investors will most likely see revenue growth of over 10% from Boxer for the next three years.

However, earnings growth can come under pressure due to rising finance costs and declining margins, likely resulting in mid-single-digit growth.

“That may disappoint some investors. However, for those who can hold on, you will most likely get operational leverage, which will result in earnings growing faster than revenue.”

Duys said Boxer is in a growth phase where earnings growth will not be the same or higher than revenue growth.

“Boxer is investing in the future, which is good for long-term growth. However, it is not a great result in the short term,” he said.