{"id":842325,"date":"2025-11-07T13:30:00","date_gmt":"2025-11-07T11:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=842325"},"modified":"2025-11-07T12:44:28","modified_gmt":"2025-11-07T10:44:28","slug":"major-south-african-retailer-takes-a-hit-in-australia-and-the-uk","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/842325\/major-south-african-retailer-takes-a-hit-in-australia-and-the-uk\/","title":{"rendered":"Major South African retailer takes a hit in Australia and the UK"},"content":{"rendered":"\n

The Foschini Group (TFG) has seen a decline in earnings amid significant challenges in South Africa, the UK, and Australia. <\/p>\n\n\n\n

In its results for the six months ended 30 September 2025, TFG saw its revenue increase 12.2% to R31.4 billion.\u00a0<\/p>\n\n\n\n

However, basic earnings per share (EPS) were 21.0% lower at 290.8 cents, and Headline earnings per share (HEPS) were 21.3% lower at 292.6 cents.<\/p>\n\n\n\n

The group said that sentiment and discretionary spending in South Africa remained subdued despite moderating inflation and recent interest rate cuts. <\/p>\n\n\n\n

Sales in South Africa grew 5.3%, supported by a strong start to winter trade. However, winter activity softened during June and September, which negatively impacted sales. <\/p>\n\n\n\n

During the period, 47 stores were opened and 42 were closed, resulting in TFG Africa now operating out of 3,619 stores across six countries.<\/p>\n\n\n\n

\u201cWhilst costs were well maintained, winter clearance markdowns, necessitated by the tougher than expected trading environment, reduced gross margins by 90 basis points,\u201d said the group.<\/p>\n\n\n\n

\u201cThis resulted in negative operating leverage leading to a 9.7% decline in segmental EBIT.\u201d\u00a0<\/p>\n\n\n\n

In the UK, sales increased by 69.0% when including White Stuff, and by only 0.7% when excluding White Stuff. <\/p>\n\n\n\n

The group said that trading in existing brands continued to be negatively affected by the prolonged weakness in the UK economy. <\/p>\n\n\n\n

TFG stated that management’s efforts to protect the operating profit margin through cost containment and reduction initiatives could not fully mitigate inflationary pressures. <\/p>\n\n\n\n

Gross margins decreased by 370 basis points to 64.1%, mainly due to the acquisition of White Stuff, which trades at a lower margin.<\/p>\n\n\n\n

In Australia, the group\u2019s sales for the period contracted by 0.5% in AUD as discretionary spend remained subdued. <\/p>\n\n\n\n

This was due to expense growth being ahead of sales, driven by costs of new stores and continued inflationary pressures; which saw EBIT dropping by 18.4%. <\/p>\n\n\n\n

Amid the challenging environment, TFG dropped its interim dividend by 18.8% to 130.0 cents per share (Sept 2024: 160.0 cents per share). <\/p>\n\n\n\n

However, the TFG board believes that TFG shares are trading at a discount to their intrinsic value and has initiated a share repurchase. <\/p>\n\n\n\n

The company is looking to repurchase R1.0 billion in shares, and has repurchased R377 million in shares by 30 September 2025. <\/p>\n\n\n\n

Outlook<\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

TFG said that it will continue to navigate weak macroeconomic conditions across its key markets. <\/p>\n\n\n\n

In South Africa, consumers remain under pressure despite inflation easing somewhat, as weak GDP growth and high unemployment persist in hindering their economic recovery. <\/p>\n\n\n\n

In the first half of FY 2026, the company said that it started against a higher base, which included last year’s two-pot withdrawals.<\/p>\n\n\n\n

\u201cWhile the first half has been difficult, the Group remains focused on operational resilience, prudent capital allocation, and leveraging its platform strengths and digital channels to drive growth,\u201d it said.<\/p>\n\n\n\n

Metric<\/strong><\/td>Interim Results<\/strong><\/td><\/tr>
Group revenue<\/td>Up 12.2% to R31.4 billion<\/td><\/tr>
Group sales<\/td>Up 12.7% to R29.2 billion (3.5% excluding White Stuff)<\/td><\/tr>
Group gross profit<\/td>Up 12.3% to R14.4 billion<\/td><\/tr>
Group gross margin<\/td>Contracted 20 bps to 49.3%<\/td><\/tr>
Operating profit<\/td>Down 9.9% to R2.3 billion<\/td><\/tr>
Basic EPS<\/td>Down 21.0% to 290.8 cents<\/td><\/tr>
HEPS<\/td>Down 21.3% to 292.6 cents<\/td><\/tr>
Interim dividend<\/td>130.0 cents per share (Sept 2024: 160.0 cents), down 18.8%<\/td><\/tr>
Share buyback<\/td>3,420,485 shares repurchased for R377 million as at 30 Sept 2025<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"

The Foschini Group has seen a drop in earnings, but believes its shares are trading at a discount to their intrinsic value. <\/p>\n","protected":false},"author":95,"featured_media":842326,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[3672,9214,20827],"class_list":["post-842325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-foschini","tag-tfg","tag-white-stuff"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842325","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=842325"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842325\/revisions"}],"predecessor-version":[{"id":842340,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842325\/revisions\/842340"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/842326"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=842325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=842325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=842325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}