{"id":843513,"date":"2025-11-18T09:00:00","date_gmt":"2025-11-18T07:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=843513"},"modified":"2025-11-18T09:04:38","modified_gmt":"2025-11-18T07:04:38","slug":"south-african-investment-legend-backs-struggling-retailer","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/843513\/south-african-investment-legend-backs-struggling-retailer\/","title":{"rendered":"South African investment legend backs struggling retailer"},"content":{"rendered":"\n

The Foschini Group (TFG) has experienced a significant decline in its share price in recent weeks, but investment legend David Shapiro of Sasfin Securities remains incredibly bullish on the stock. <\/p>\n\n\n\n

In August, TFG held a Capital Markets Day, during which the company\u2019s management team painted a rosy picture of South Africa\u2019s prospects.\u00a0<\/p>\n\n\n\n

Management said that TFG was outperforming the market via consistent share market gains and category leadership. <\/p>\n\n\n\n

There was also sustainable growth via organic expansion, strategic acquisitions, and diversification.<\/p>\n\n\n\n

However, a trading statement published in October 2025 saw the group report relatively weak results. <\/p>\n\n\n\n

When recently acquired White Stuff was excluded, sales only rose by a subdued 3.5% over the six months ending 30 September 2025.\u00a0<\/p>\n\n\n\n

This caused a sharp decline in the company\u2019s share price immediately following the release of the trading statement. <\/p>\n\n\n\n

Shane Watkins, Chief Investment Officer at All Weather Capital, stated that the reason for the decline was not due to a poor trading statement.<\/p>\n\n\n\n

Watkins explained that the drop was due to the unexpectedly bad result, considering what management had told institutional investors during the capital markets day. <\/p>\n\n\n\n

TFG\u2019s management team painted a more rosy picture of TFG\u2019s results, and did not communicate the challenges the company was facing in South Africa, the UK and Australia. <\/p>\n\n\n\n

The poor trading environments in all three countries were reflected in the official interim results published on November 7, 2025. <\/p>\n\n\n\n

Basic earnings per share (EPS) decreased by 21.0% to 290.8 cents, and headline earnings per share (HEPS) decreased by 21.3% to 292.6 cents in the interim results. <\/p>\n\n\n\n

The group also cut its interim dividend by 18.8% to 130.0 cents per share (Sept 2024: 160.0 cents per share). <\/p>\n\n\n\n

Shapiro is optimistic <\/h2>\n\n\n
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David Shapiro from Sasfin Securities<\/figcaption><\/figure><\/div>\n\n\n

Speaking with Business Day TV<\/a>, Shapiro was shocked by the performance of TFG\u2019s stock, which had declined by around 50% over the past few weeks. This has brought the stock to levels seen five years ago.\u00a0<\/p>\n\n\n\n

He said that the company is facing some balance sheet struggles, including being overgeared.<\/p>\n\n\n\n

However, he highlighted that the company has good brands, strong management, a nationwide store network and a diversified base.\u00a0He thus believes that the stock is incredibly well-valued.\u00a0<\/p>\n\n\n\n

Shapiro is also bullish on the market and believes that the stock market is set for a strong year.\u00a0He said that TFG is his \u201cpunt of the year,\u201d with the company set to see a recovery in its share price. <\/p>\n\n\n\n

Although he warned that the stock could go further down with stores forced to close, he doesn\u2019t believe that this will happen. <\/p>\n\n\n\n

The current data on TFG supports Shapiro\u2019s view, with the company having a price-to-earnings ratio of 10 and a dividend yield of over 4%. These point to an undervalued stock. <\/p>\n\n\n\n

The TFG board also seems to believe that the share is trading at a discount and has initiated a massive share repurchase.\u00a0<\/p>\n\n\n\n

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

<\/p>\n\n\n

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TFG share price over the last five years<\/figcaption><\/figure><\/div>\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>
TFG’s latest interim results for the six months ended 30 September 2025 <\/figcaption><\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"

David Shapiro from Sasfin Securities has deemed The Foschini Group as his “punt of the year,” with the investment legend expecting a rise in the stock price. <\/p>\n","protected":false},"author":95,"featured_media":843517,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[7708,9214],"class_list":["post-843513","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-sasfin-securities","tag-tfg"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843513","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=843513"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843513\/revisions"}],"predecessor-version":[{"id":843564,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843513\/revisions\/843564"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/843517"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=843513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=843513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=843513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}