MRP share price breakout following upbeat retail sales
A quarterly update from MRP has highlighted strong retail sales supported by recent acquisitions and easing supply chain disruptions.
Mr Price Group
The Mr Price Group (MRP) has released a strong trading update for the 13 weeks ending 1 January 2022.
The group has reported a 19.2% increase in retail sales and other income. The recent acquisitions of Power Fashion and Yuppie Chef supported growth over the reporting period. The omission of the acquistive growth sees the retail sales figure having instead increased by around 7% over the quarter. Lower markdowns have helped a marginal expansion in gross profit margins of 0.6%.
A summary of divisional sales is as follows:
The home segment grew sales by 0.7% contributing 22.6% to the group retail sales figure
The apparel segment grew sales by 6.4% contributing 74.5% to the group retail sales figure
Online e-commerce sales added 55.1% (including Yuppie Chef) over the reporting period, contributing just less than 3% of total sales
Cellular handsets and accessories grew sales by 18.7% contributing 2.9% to the group retail sales figure
Online sales supported by the groups new e-commerce platform and the acquisition of Yuppiechef increased by 55.1% contributing 2.7% to group sales. MrP has also noted a resurgence in credit sales which grew by 10.6% over the reporting period.
The group has benefitted from short term improvements in trading activity as global supply chain disruptions abate to support earnings. But while conditions have improved, the outlook remains uncertain with rising input costs from inflation and exchange rates future catalysts to consider.
Mr Price – Technical View
The share price of Mr. Price has gapped higher following the trade update for the quarter. The gap higher considers a breakout from the 19000 (support) to 21350 (resistance) range previously in play.
The gap shows strong upside momentum with the 22725 resistance level as the initial target from the move. Traders who are long might consider using a close below gap support at 21285 as a stop loss indication for the trade.
In summary:
Retail sales growth and other income increased by 19.2% in the 13 weeks to 1 Jan 2022 (year on year)
Earnings were supported through acquisitive growth (Yuppiechef & Power Fashion)
Online sales led retail sales growth (+55.1%)
A daily chart of MRP shows an upside range breakout following the sales update
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