{"id":837666,"date":"2025-09-16T13:13:36","date_gmt":"2025-09-16T11:13:36","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=837666"},"modified":"2025-09-16T13:13:42","modified_gmt":"2025-09-16T11:13:42","slug":"40-year-old-south-african-retail-giant-set-for-major-gains","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/837666\/40-year-old-south-african-retail-giant-set-for-major-gains\/","title":{"rendered":"40-year-old South African retail giant set for major gains"},"content":{"rendered":"\n

PSG Wealth\u2019s Fisokuhle Mbutho says Mr Price is an undervalued stock, with the retailer set for further market share gains <\/p>\n\n\n\n

Founded in 1985, Mr Price has become one of the largest retailers in South Africa, and offers fashion, homeware, and cellular services. <\/p>\n\n\n\n

The investment firm’s analysis has been updated to incorporate the latest trading update from Mr Price for the 13 weeks ended June 2025. <\/p>\n\n\n\n

In the update, the group noted that retail sales increased by 6.3% to R9 billion, and comparable store sales grew by 3.0%. <\/p>\n\n\n\n

The retailer also saw market share gains of 10 basis points over the quarter, having gained over R300 million in market share from its competitors from the prior year. <\/p>\n\n\n\n

A rise in retail sales was boosted by a timing shift of Easter holidays into April and strong sales growth in May due to a timely winter season against a weak base of negative sales growth amid pre-election consumer restraint in 2024. <\/p>\n\n\n\n

That said, June 2025 saw a decline in retail sales compared to June 2024, which was boosted by the late onset of winter and a rise in consumer confidence following the election. <\/p>\n\n\n\n

Although the group anticipated softer sales growth for June 2025, the impact of a shift in school holidays from the last two weeks into July was greater than expected. <\/p>\n\n\n\n

Overall, trading space increased 3.7% on a weighted average basis. The company saw its store footprint increase by 31 stores (net), and the group\u2019s total footprint expanded to 3,061 stores. <\/p>\n\n\n\n

Looking at the specifics, the apparel segment saw a 6.0% increase, the homeware segment 6.4%, and the telecommunications segment 12.7%. <\/p>\n\n\n\n

Q1 FY2026 vs FY2025<\/strong><\/td>Retail sales growth<\/strong><\/td>Cont. to retail sales<\/strong><\/td><\/tr>
Apparel segment<\/td>6.0%<\/td>78.6%<\/td><\/tr>
Homeware segment<\/td>6.4%<\/td>17.8%<\/td><\/tr>
Telecoms segment<\/td>12.7%<\/td>3.6%<\/td><\/tr>
Group<\/td>6.3%<\/td>100.0%<\/td><\/tr><\/tbody><\/table><\/div>
Source: Mr Price<\/figcaption><\/figure>\n\n\n\n

PSG Wealth’s perspective <\/h2>\n\n\n\n

In his analysis, Mbutho noted that Mr Price is undervalued, given its stable revenue growth and earnings.\u00a0<\/p>\n\n\n\n

PSG Wealth has an intrinsic value of R286 per share for Mr Price, far higher than the current market price of around R211. <\/p>\n\n\n\n

The recommendation is based on MR Price trading at low availabilities and attractive levels. <\/p>\n\n\n\n

The group is also expected to benefit from an improved consumer environment, with low inflation and interest rates set to help consumer finances. <\/p>\n\n\n\n

Mbutho added that Mr Price is set to see market share and long-term growth gains, stemming from the group\u2019s organic brands and expanding on acquired ones.<\/p>\n\n\n\n

The organic brands refer to Mr Price Kids, Mr Price Cellular and its other spin-off brands across South Africa. <\/p>\n\n\n\n

Regarding acquired brands, Mr Price has purchased Yuppiechef, Power Fashion and Studio 88 since 2021. <\/p>\n\n\n\n

The group has been on a massive rise in its store base, with the total number of stores having more than doubled from its 1,400 stores seen in 2021. <\/p>\n\n\n\n

Regarding financials, Mr Price is preferred by PSG Wealth due to the higher fundamentals, including stable margins & earnings growth. <\/p>\n\n\n\n

The group also has far lower debt levels than its competitors. The group also trades at a lower forward price to earnings ratio (P:E) than its rival Pepkor. <\/p>\n\n\n\n

Although it has a similar P:E to Woolworths, the food retailer is battling underperforming South African and Australian fashion businesses. <\/p>\n\n\n\n

PSG Wealth is not the only investment company that is optimistic over Mr Price’s potential, with FNB Wealth and Investments<\/a> also backing the retailer. <\/p>\n\n\n\n

FNB Wealth and Investments noted that Shein and Temu fatigue in South Africa should be a boost for Mr Price. <\/p>\n\n\n\n

Financials <\/strong><\/h2>\n\n\n
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PSG Wealth\u2019s Fisokuhle Mbutho says Mr Price is an undervalued stock, with the retailer showing strong earnings growth. <\/p>\n","protected":false},"author":95,"featured_media":827569,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[16400,2910,11232,5189],"class_list":["post-837666","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-fnb-wealth-and-investments","tag-mr-price","tag-psg-wealth","tag-yuppiechef"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837666","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=837666"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837666\/revisions"}],"predecessor-version":[{"id":837680,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837666\/revisions\/837680"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/827569"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=837666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=837666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=837666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}