Shoprite share price shows mixed reaction to interim results
Shoprite saw a robust 14.6% sales increase in its core South African supermarket business.
Key Takeaways:
- Strategic Sales Growth: Shoprite Holdings Limited showcased significant sales growth of 14.6% in its core South African supermarket segment during the 26 weeks ended 31 December 2023, leading to a substantial increase in customer spend by R12.4 billion over the previous year.
- Expansion and Operational Success: The Group's successful expansion, including the acquisition of 51 stores from Massmart Holdings Ltd and the launch of 197 new stores, totals 3,543 stores, aligning with its strategic plan for growth and market share acquisition in a challenging operational context.
- Innovative Customer Engagement: The introduction and expansion of the Checkers Sixty60 app, resulting in a 63.1% sales increase, highlight Shoprite’s focus on innovative customer engagement strategies, particularly in on-demand delivery services.
- Investment in People and Employment Creation: Shoprite's investment in employment growth is evident in the creation of 2,617 new jobs, reaffirming its commitment to contributing positively to the economic and social landscape of the regions it operates in.
Comments on Shoprite Interim results
Shoprite Holdings Limited has delivered a strong performance for the 26 weeks ending 31 December 2023, witnessing a robust 14.6% sales increase in its core South African supermarket business, translating to an additional R12.4 billion in customer spend. This achievement is notably commendable considering the high sales growth base of 17.5% from the previous year. Key drivers of this success include strategic expansions, notably the acquisition of 51 stores from Massmart Holdings Ltd, and significant sales growth in both Checkers and Checkers Hyper by 13.7% and the Checkers Sixty60 app by 63.1%. Despite challenging conditions such as load-shedding, Shoprite reported rising profits and dividends. Investments across tech, digital, supply chain, and store expansions have been pivotal, alongside the creation of 2,617 new jobs, underscoring the group's commitment to growth and community impact.
Long term broker ratings and price target
A consensus of 9 analyst estimates sourced from Refinitiv data (as of the 6th of March 2024) suggests a long-term hold for Shoprite Holdings. A mean of these analyst’s price targets suggests a long term (12 month) fair value of 27100c for the stock.
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