Mr Price jumps over 6% on more market share gains

Group declares an interim dividend of 303.6 cents per share, up 7.1% compared to the corresponding half-year. 

Shares in Durban-based apparel and homeware retail giant Mr Price jumped over 6% on Thursday, following the group’s release of robust half-year results ending 28 September 2024. The better performance than some of its peers, initially saw its stock surge over 8% in morning trade.

While revenue increased 5.2% to R17.6 billion and basic and headline earnings per share rose by 7.3% and 7.1%, respectively, the group reporting double-digit sales growth in recent months, market share gains and increased margins buoyed the stock.

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Mr Price Share Price

Mr Price said it had expanded its gross margin by 110 basis points (bps) to 39.7% during the period.

It declared an interim dividend of 303.6 cents per share, up 7.1% compared to the corresponding half-year.

The group noted that despite economic challenges, including constrained consumer affordability, it gained market share in five out of six months during the period. It has now gained market share for four consecutive quarters.

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Mr Price Group CEO Mark Blair commented: “The financial year started with a very challenging first quarter, impacted by a contraction in the economy caused by uncertainty prior to the national elections and the late onset of winter. We are very satisfied with our overall market share performance, which was supported by higher gross margins in all three trading segments.”

“The increasing sales momentum in the second quarter and the strong start in the second half with sales up 12.4% in the first 7 weeks is encouraging and hopefully early signs that South Africa is entering an upward economic cycle,” added Blair.

Mr Price’s apparel segment achieved a 4.9% increase in retail sales, reaching R13.3 billion and surpassing the market’s overall growth. It said sales gained momentum in the second quarter, culminating in strong growth by September.

Comparable sales saw a modest improvement of just 0.6%, while the segment expanded its market presence for the fifth consecutive quarter.

“The division’s flagship, Mr Price Apparel continued its positive momentum and regained over R1 billion in market share from its competitors in the last 12 months,” the group pointed out.

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Retail sales in the homeware segment rose 4.3% to R3 billion, with stronger performance in the second quarter compared to the first. Comparable sales shifted into positive territory, showing steady improvement from -0.6% in Q1 to 0.8% in Q2.

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Mr Price’s telecoms segment recorded impressive growth, with sales increasing 13.1%, to R603 million. This division, which includes Mr Price Cellular and Powercell, continued to expand its market share, up a further 80bps during the period.

Store expansion

Mr Price opened 92 new stores, bringing its footprint to 2 958 stores, and is set to launch its 3 000th store on 27 November.

The group invested R383 million in new stores and revamps and ended the period debt-free with R2.2 billion cash. It has maintained a capex forecast of R1 billion for 200 stores.

The retailer said its focus on inventory management enabled a smooth exit from the winter season, while reducing end-of-season markdowns.

Gross inventory grew by 13.6%, driven by early stock arrivals for the festive period to mitigate supply chain risks. Excluding goods in transit, inventory increased 9.5%, with stock freshness improving to 86.5% from 81% in the previous period, it said.

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