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Pepkor shares slump on trading update

Jan 28 2019 22:59
Lameez Omarjee

Pepkor Group's shares dropped as much as 7% on the back of the release of its trading update.

The retailer on Monday issued its trading update for the three months ended December 31.

Pepkor shares opened at R21.41, but dived 7.36% to trade at R19.54 shortly after the release of the trading update. They finished the day 4.29% down at R20.10. 

The trading update showed that Pepkor increased its revenue by 6.1% to R19.5bn.

The group's clothing and general merchandise segment reported sales growth of 6.1%. In aggregate, its Pep and Ackermans brands reported sales growth of 6.8%. Core clothing, footware and homeware product categories achieved 8.6% sales growth.

In rand terms, Pep Africa reported a decline in sales by 4.8% due to currency devaluation and poor performance in Zimbabwe. But in constant currency terms, the group reported sales growth of 18.7%, the trading update read. African operations were supported by improved performance in Angola, Zambia and Nigeria.

Its specialty division reported sales growth of 7.3%.

As for its furniture, appliances & electronics segment, sales growth of 0.6% was reported. Building materials reported sales growth of 2.3%.

"Performance was supported from a wholesale perspective; however, discounting in this highly competitive and contracting market continues to put margins under pressure," the group said.

Its Fintech division FLASH reflected "significant growth" of 31.3%.

As for its outlook, the group expects its "fundamentals" of providing "value at affordable prices" will continue to "support future performance in a very challenging retail environment," the update read.

pepkor  |  retail  |  sales  |  business
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