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Johannesburg - Retailer Pick n Pay Stores [JSE:PIK] advised on Thursday that it is expecting lower earnings for the year ended February 2011.
It said headline earnings per share and diluted HEPS from continuing operations were expected to be 10% to 25% lower, while total HEPS and total diluted HEPS (including Score and Franklins),would be between 15% and 30% lower.
Earnings per share and diluted EPS from continuing operations as well as total EPS and total diluted EPS, all of which include the prior year profit on the sale of properties will be between 25% and 40% lower.
The group said that as previously reported, it exited the operations of Score Supermarkets in the previous financial year and was in the process of exiting from Franklins Australia, both of which were now disclosed as discontinued operations.
During the year ended 28 February 2010 (prior year reporting period) the group realised a capital profit on the sale of properties which was excluded from headline earnings and had a marked effect on the growth of earnings per share (EPS) relative to headline earnings per share (HEPS).
"Trading conditions in the second half of the year were particularly tough due to: the adverse effect of a Pick n Pay national labour strike during our peak trading period and it's after effects; cost inflation exceeding internal selling price inflation; and our continued investment in gross margin.
"Given the disclosure of Score and Franklins as discontinued operations and the effect of the property profit last year we consider HEPS from continuing operations to be a more accurate indicator of the performance of the Group," Pick n Pay added.
The group's results will be published on April 18.
It said headline earnings per share and diluted HEPS from continuing operations were expected to be 10% to 25% lower, while total HEPS and total diluted HEPS (including Score and Franklins),would be between 15% and 30% lower.
Earnings per share and diluted EPS from continuing operations as well as total EPS and total diluted EPS, all of which include the prior year profit on the sale of properties will be between 25% and 40% lower.
The group said that as previously reported, it exited the operations of Score Supermarkets in the previous financial year and was in the process of exiting from Franklins Australia, both of which were now disclosed as discontinued operations.
During the year ended 28 February 2010 (prior year reporting period) the group realised a capital profit on the sale of properties which was excluded from headline earnings and had a marked effect on the growth of earnings per share (EPS) relative to headline earnings per share (HEPS).
"Trading conditions in the second half of the year were particularly tough due to: the adverse effect of a Pick n Pay national labour strike during our peak trading period and it's after effects; cost inflation exceeding internal selling price inflation; and our continued investment in gross margin.
"Given the disclosure of Score and Franklins as discontinued operations and the effect of the property profit last year we consider HEPS from continuing operations to be a more accurate indicator of the performance of the Group," Pick n Pay added.
The group's results will be published on April 18.
