Major South African retailer falling short

Truworths reported weak results for its 2025 financial year, with a decline in profit and earnings despite higher sales.

This comes as many of Truworths’ competitors in South Africa’s clothing retail market are going from strength to strength and taking up market share as they go.

Truworths owns many well-known South African brands, including Daniel Hechter, Uzzi, Ginger Mary, Naartjie, and LTD Kids.

The retailer operates primarily in South Africa and the United Kingdom, but also has a presence in Ireland and other sub-Saharan African countries. It is listed on the JSE with a market cap of R24.61 billion.

On Thursday, 28 August, Truworths released its results for the 52 weeks ended 29 June 2025, which revealed poor performance for the group.

The retailer’s revenue grew by a modest 2.83% to R23.01 billion, while sales rose by 3.19% to R21.32 billion.

However, the company’s cost of sales outpaced sales growth, having increased by 5.38% to R10.39 billion.

Truworths’ profit for the year dropped by 28.31% to R2.80 billion, while its basic earnings per share shrank by 28.82% to 745.2 cents.

In a trading update released prior to these results, Truworths attributed its poor performance to South Africa’s persistently sub-optimal macroeconomic conditions.

The retailer explained that its 2025 financial year began with cautious optimism following South Africa’s national general elections in May 2024 and the subsequent formation of a Government of National Unity (GNU).

However, according to Truworths, much of this optimism failed to materialise due to a combination of geopolitical uncertainties and internal challenges within the GNU. 

“Consequently, South Africa’s macroeconomic environment remained constrained, characterised by low economic growth, stagnant real wage increases, elevated unemployment, and rising living costs, all of which continued to erode consumer disposable income,” it said.

This saw Truworths Africa’s gross profit margin come under pressure relative to historical norms.

It said this pressure was heightened by late deliveries of winter merchandise in the prior period due to port congestion and global shipping disruptions, combined with the delayed onset of winter in 2024, which dampened seasonal demand. 

“As a result, elevated markdowns were required in the first half of the current period to meet terminal stock objectives,” the retailer explained. 

“Continued weak trading conditions necessitated increased in-season promotional activity to manage inventory levels effectively.”

Truworths declared a final dividend of 170 cents per share, bringing its annual dividend to 487 cents per share.

Truworths falling behind

While Truworths is struggling to increase its earnings and profits in South Africa’s weak economy, its competitors are going from strength to strength.

Mr Price’s recent annual results for its 2025 financial year saw the retailer report a 7.9% increase in revenue to R40.9 billion, while its basic earnings were up 11% to 1,416.3 cents.

Group retail sales of R39.4 billion increased 7.8%, and comparable store sales increased 3.4%. 

The Foschini Group (TFG) also recorded a solid performance for its 2025 financial year, as its store expansions and a UK acquisition boosted sales.

TFG’s results for the year ended 31 March 2025 showed that revenue increased 4.1% to R62.6 billion, while basic earnings per share grew by 4.9% to 980.6 cents per share.

Both retailers have also seen their market share grow over their most recent reporting periods.

Mr Price is currently listed on the JSE with a market cap of R53.63 billion, while TFG’s market cap stands at R35.87 billion.

It should be noted that Truworths, Mr Price and TFG have seen their share prices decline significantly in the year to date, with all three retailers down between 30% and 40% in 2025 so far.

The year-to-date share price performance of all three retailers can be seen in the graph below, captured on 28 August at around 16:00.