- Truworths International reports 8.2% growth in retail sales.
- Truworths Africa faces challenges with declining like-for-like store sales.
- UK-based Office segment sees significant increase in retail sales.
Sandton - Truworths International Limited (TRU.J) on Monday reported an 8.2% growth in retail sales for the 26-week period ended 31 December 2023. The South African-based fashion retailer revealed that its retail sales rose to R12.2 billion ($821 million), compared to R11.3 billion in the same period last year.
Truworths Africa, the company's primary business segment, experienced a slight decline in retail sales by 0.3%, amounting to R8.4 billion, attributed to challenging economic conditions and high interest rates in South Africa. Truworths Africa's gross trade receivables increased by 1.6% to R7.2 billion, reflecting the attractiveness of the company's account and merchandise offering.
On the other hand, the UK-based Office segment of Truworths International saw a significant increase in retail sales, recording a surge of 15.6% in sterling terms to £162 million ($207 million). Office's strong online presence and strategic brand partnerships contributed to its robust performance. Online sales accounted for approximately 47% of Office's retail sales during the reporting period.
Despite the positive growth in retail sales, the company's like-for-like store retail sales in Truworths Africa declined by 3.3%. Truworths Africa's trading space increased by 0.9%, and inflation in retail selling prices averaged 8.4% during the period.
Respect Gwenzi, Chief Analyst at Equity Axis, commented on Truworths International's performance, stating, "The company's overall retail sales growth of 8.2% demonstrates its resilience in a challenging economic environment. However, the decline in like-for-like store sales in Truworths Africa and the impact of high base effect in the prior period raise concerns about the company's ability to sustain its growth momentum."
Looking ahead, Gwenzi added, "Truworths International's expansion plans and investments in new stores and store renovations indicate a positive outlook. The company's strategic focus on online sales and brand partnerships, as evident in the Office segment's strong performance, could further enhance its growth prospects. However, continued economic challenges and consumer confidence issues in South Africa may pose headwinds to the company's performance."
Truworths International is scheduled to release its interim results for the current period on or about February 29, 2024.
(Note: This article has been written with the help of AI.)
-Equity Axis News
