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Cape Town - Truworths' share price on Thursday surged close to 11% to its highest level in almost three years after the retailer said its sales for the first 18 trading weeks of the 2016 year hit R4.4bn.
The fashion retail group said the increase in sales represents a 19% increase on the previous corresponding period.
Shares in Truworths International [JSE:TRU] were trading at R104.89 (+8.69%), a new 52-week high and the highest since it reached R114.47 on December 30, 2012, data from INET BFA show.
READ:Truworths star performer on JSE
Truworths said in a trade update sales grew by 25% and credit sales by 17% in the review period. These figures include the non-comparable retail sales for Earthchild and Naartjie, which were acquired subsequent to the corresponding prior period. Excluding the retail sales recorded by Earthchild and Naartjie, the group retail sales for the period increased by 16% to R4.3bn.
"Like-for-like store retail sales, which exclude Earthchild and Naartjie retail sales, increased by 10% for the period, while product inflation averaged 7%," the group explained.
Credit sales comprised 69% of retail sales, compared to 71% in the corresponding period in 2014. Credit sales excluding retail sales attributable to the Earthchild and Naartjie businesses comprised 71% of retail sales during the period.
Gross trade receivables increased by 15% to R5.4bn .
The percentage of active account holders able to purchase is at 85% compared to 84% in the corresponding prior period.
READ: Truworths sales growing
The group said it will continue to utilise its extensive experience to manage the risk of fashion through its "proven merchandise design and buying processes" and manage credit risk through continuing to apply strategies to ensure the on-going health of the debtors' book.
It alerted shareholders that the financial information provided has not been reviewed by the group's external auditors and that the interim results for the 26-week period ending December 27 2015 are scheduled for release on or about February 18 2016.
In August Truworths reported a stronger second half performance for the period to June 2015 as credit conditions showed early signs of improvement. Retail sales increased by 8% to R11.6bn, with sales growing by 12% in the second half compared to 5% in the first half.
Diluted headline earnings per share grew 4% to R5.92 after growing by 0.8% in the first half and by 8.4% in the second half. The annual dividend was increased by 5% to R4.05 per share, with the dividend cover ratio being maintained at 1.5 times.
Earlier this year Truworths' CEO Michael Mark told Fin24 that, after building up its women's and men's wear in-store emporiums with its own brands, Truworths is setting its focus to conquering the children's wear market.
"One of the key unique differentiator things about Truworths is that we own all of our own brands which we believe are the most appealing to the mainstream fashion retail South African consumer. Our philosophy has always been to own our own brands," Mark told Fin24 at the time.
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