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Mr Price Group Limited
(Registration number 1933/004418/06)
Incorporated in the Republic of South Africa
ISIN: ZAE000200457
LEI number: 378900D3417C35C5D733
JSE and A2X share code: MRP
("Company" or "group")
VOLUNTARY TRADING UPDATE FOR THE 13 WEEKS ENDED 28 DECEMBER 2024
For the third quarter from 29 September 2024 to 28 December 2024
("Period") of the financial year ending 29 March 2025, Mr Price
Group recorded double digit retail sales growth and market share
gains at improved GP margins compared to the corresponding period.
Group retail sales increased by 10.6% (2-year CAGR: 10.3%) to
R14.6bn against a firm sales growth base of 9.9%. Market share
gains of 60bps, per the Retailers' Liaison Committee (RLC), were
supported by comparable store sales growth of 6.3%. During the
Period the group outperformed the total comparable market's retail
sales growth of 6.4% (as per RLC), gaining market share in each
month and has now gained share for six consecutive quarters.
Performance summary
The group previously reported in its interim results outlook (21
November 2024) that its performance into Q3 had gained momentum
against an improving consumer backdrop. Retail sales in October
increased 11.5%, with resultant market share gains of 70bps. Sales
further improved into the first two weeks of November, increasing
14.7%, resulting in sales growth of 12.4% in the combined first 7
weeks of Q3.
It is important to note that the performance in the last two weeks
of November was not comparable due to:
- Black Friday having occurred in week 4 in 2024 versus week 3
in 2023
- The shift in the retail calendar resulted in part of the Black
Friday weekend and Cyber Monday falling into December
- Certain paydays and social grant payments were moved into
December in 2024 versus November in 2023
Despite the above movements, the group's retail sales growth of
5.9% for November outperformed the total comparable market's
growth. The group gained 60bps of market share in the month,
including market share gains in the key Black Friday week.
The group recorded a strong performance in the month of December
with retail sales increasing 12.8%, against a sales growth base of
15.5%. Mr Price Apparel and all acquired businesses delivered
double digit growth in the month, and the group gained 70bps of
market share.
Retail sales for the group's corporate-owned stores was as follows:
Retail sales Cont. to
growth retail sales
Q3 FY2025 vs FY2024
Apparel segment 10.9% 83.4%
Homeware segment 7.9% 13.9%
Telecoms segment 16.5% 2.7%
Group 10.6% 100.0%
Group retail sales grew 10.6% to R14.6bn and comparable store sales
increased 6.3%. South African retail sales grew 10.8% (comparable
store sales: 6.4%) to R13.6bn while non-South African corporate-
owned store sales increased 7.7% to R1.0bn. Total store sales
increased 10.6% while online sales increased 10.5%. Online sales
contributed 1.8% of total retail sales during the Period, with a
strong growth of 21.9% in December.
The group's ongoing strong merchandise offer supported the
increase of more full-price items being sold and fewer markdowns
than the corresponding period, resulting in retail selling price
inflation of 5.3%. Total unit sales increased 4.8% to 110.4m.
The group reached a significant milestone with the opening of its
3000th store during the quarter. In total 78 new stores were opened,
and the group closed the period with a store footprint of 3 031.
Trading space increased 4.9% on a weighted average basis.
Cash sales grew by 11.1%, increasing the contribution to total
retail sales to 90.9%. Credit sales increased 5.7% as the group's
account approval framework continued to be implemented with
caution. This was against a backdrop of consumer credit
applications reaching an all-time high in Q3 2024, while rejection
rates remain elevated, according to the National Credit Regulator.
Retail sales in the Apparel segment grew 10.9% during the quarter
(2-year CAGR: 11.3%) and accelerated to 13.2% in December.
Comparable store sales for the Period increased 6.5% and unit sales
increased 4.8%. Mr Price Apparel continued to gain market share,
increasing 80bps, marking six consecutive quarters of gains and
the division reached an all-time high market share level in
December. Studio 88 grew retail sales by double digits and recorded
the highest comparable store sales growth in the segment for both
the quarter (7.9%) and the month of December (9.5%). Power Fashion
achieved the highest retail sales growth in the segment for the
Period and has now gained market share for thirteen consecutive
quarters.
The Homeware segment's retail sales growth of 7.9% (2-year CAGR:
4.4%) continued to gain momentum, achieving its highest quarterly
sales growth of the financial year to date. Comparable store sales
increased 5.8% and unit sales increased 4.7%. All homeware
divisions grew GP margins and Yuppiechef did so with double-digit
sales growth (2-year CAGR: 18.4%) and reached its highest December
market share level to date.
The Telecoms segment continued its high growth performance with
retail sales up 16.5% (2-year CAGR: 12.7%), driven by strong
performances over Black Friday and the month of December.
Comparable store sales increased 5.3%. Further market share gains
were achieved, up 10bps according to GfK (November 2024, latest
available data).
Other income increased 4.2% to R314.2m due to higher debtors'
interest and fees from the group's retail debtors' book.
Outlook
The 2025 economic growth outlook for South Africa is anticipated
to improve in comparison to 2024. A steadily improving consumer
environment, aided by decreasing inflation and lower interest
rates, continues to build a solid platform for growth in comparison
to recent years.
However, there are several risk events which could dampen growth
forecasts globally. The international political and economic
landscapes remain uncertain and could impact inflation and
interest rate expectations. Additionally, the positive impact of
the Government of National Unity in South Africa and its ability
to continue building on its initial success will be closely
monitored.
Despite these external factors, management remain optimistic about
the year ahead. The group's strong merchandise execution, which
offers its customers differentiated fashion-value, and its EDLP
pricing model makes it well positioned to continue its profitable
market share gains.
Performance in the first three weeks of January is encouraging
with double digit retail sales growth and GP margin gains across
each of its trading segments. The group is focused on continuing
its strong execution in quarter four with plans being well set for
the new financial year.
The above-mentioned figures and information contained herein do
not constitute an earnings forecast or estimate and have not been
reviewed and reported on by the Company's external auditors.
Durban
22 January 2025
JSE Equity Sponsor and Corporate Broker
Investec Bank Limited
Date: 22-01-2025 07:05:00
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