Mr. Price released a trading statement yesterday afternoon indicating expectations for basic earnings per share to rise between 20 – 24% and headline earnings per share to be 18-22% higher for the 26 weeks ended September 28 2013.
The statement follows a good set of results for the year-ended March 2013 despite a difficult trading environment. The group opened 31 new stores and showed recorded sales growth of 10.5% to R7.2 billion. Contributing around 30% of overall revenue, the homeware division of the group saw revenue growth of 15% and sales growth of 10% which is set to continue higher.
South African consumers are expected to remain under pressure in the short-term amid rising household costs. Mr Price targets a wide LSM group and therefore could be well placed relative to its peers to attract more customers during difficult times as more conservative shopper emerges. There is always a concern around the credit aspect of a retail business in today’s pressured consumer environment. In response, the group has implemented a self-imposed credit cap, to prevent credit sales from exceeding 25% of total sales in the medium to long-term.
Investors await final results which are expected to be released on Tuesday, 12 November 2013.