JSE-listed fashion retailer Truworths says it expects to report its highest ever full-year profit for the previous 52 weeks ended 3 July 2022. It says the latest performance was supported by improved sales, strong gross margins and cost management.
In a trading report issued after the market closed on Tuesday, Truworths said it expected earnings per share (EPS) to rise 58% to 760 cents, while headline earnings per share (Heps) would increase by up to 43%. to 745 cents.
“The previous highest Heps and EPS achieved by the group were in 2016 at 667.6 cents and 667.1 cents respectively,” the Cape Town-headquartered group said.
“There have been no significant acquisitions since 2016, so the results reflect organic growth rather than acquisition growth,” it added.
Read: Truworths sales jump as lockdown eases
Shares in Truworths jumped more than 5% to about 60.14 rand a share in morning trading on Wednesday after the fashion retailer’s latest trading reports.
Terms of trade
The fashion retailer’s record profit forecast for the period comes despite it operating in challenging trading conditions in its core markets of South Africa and the United Kingdom (UK).
In South Africa, the group’s business was adversely affected by civil unrest in July, which affected operations mainly in KwaZulu-Natal (KZN) and Gauteng, as well as floods in KZN in April this year.
Both of these events resulted in severe damage to infrastructure and the disruption of commercial operations, the group noted in a July business update.
While UK trading conditions have improved over the current reporting period with no Covid-19-related restrictions affecting trade, the group says the office business continues to be affected by the UK’s decision to leave the European Union and continues to be under attack Russia to Ukraine.
Despite these trade barriers, the firm’s update said group retail sales for the 53-week period to July 2022 would rise 9% to 18.5 billion rand, higher than 17 billion rand claimed for the previous period.
In the Truworths Africa segment, retail sales are expected to grow by 7.5% to 14 billion rand, compared to the 13 billion rand reported in the previous comparable period.
Read: TFG reports first-quarter sales jump, shares rise
Meanwhile, its UK shoe chain Office is forecast to see a 14% rise in retail sales, bringing in 4.5 billion rand.
“Office continues to benefit from its strong online presence, with online sales accounting for approximately 45% [2021: 63%] retail sales for the current period, during which stores remained fully open, in contrast to the previous period, when store closures increased the contribution of online sales,” the group noted.
Truworths will publish its 2022 results on Thursday, September 1, 2022.