Shoprite Reports Lower Than Expected Financial Year Earnings Despite Improved Performance In Home Market
Retail chain Shoprite on Tuesday reported its full-year earnings revealing that it recorded a lower than anticipated outcome as a result of “constrained economy, inventory shortages post-industrial action and the implementation of a new enterprise wide IT system.”
Shoprite’s SA division performed well generating 74.9 per cent of the sales while the rest of Shoprite’s branches in Africa including Angola made it challenging to attain profits. The supermarkets outside South Africa reported a trading loss of ZAR 265 Mn for the year that ended June 30, 2019.
Shoprite CEO Pieter Engelbrecht said the supermarket chain is committed to its customers outside South Africa despite the financial year outcomes.
“We remain confident in the opportunity our entrenched position as Africa’s leading food retailer will bring as the economic fortunes of the countries where we trade improve. Given the challenging global economic backdrop, we are remaining focused on growth opportunities in our home market, inclusive of our established African operations, rather than pursuing businesses in foreign geographies,” he said.
Basic headline earnings per share (HEPS) for the year to June 30 declined by 19.6 per cent to 780.8 cents, compared with a restated figure of 971.4 cents a year earlier while the trading profits fell by 14.3 per cent to ZAR 6.9 Bn.
The sales of merchandise grew by 3.6 per cent to ZAR 150 Bn and the operating profit was down 8.2 per cent while net profit declined 18.2 per cent to ZAR 4.2 Bn.
During the period, the chain store opened a net of 126 stores and looks to upgrade 80 stores in future.
“The performance was significantly impacted by our well documented first half challenges. With the strike in the distribution centre behind us, our team worked tirelessly to restore performance in the second half,” Engelbrecht said.
Shoprite which is Africa’s largest retailer with 2,700 stores in 15 countries is looking to expand its market further.
Featured Image Courtesy: Voila Night