{"id":862647,"date":"2026-06-05T11:55:20","date_gmt":"2026-06-05T09:55:20","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=862647"},"modified":"2026-06-05T11:55:23","modified_gmt":"2026-06-05T09:55:23","slug":"trouble-in-south-africa-the-uk-and-australia-for-major-retailer","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/862647\/trouble-in-south-africa-the-uk-and-australia-for-major-retailer\/","title":{"rendered":"Trouble in South Africa, the UK and Australia for major retailer"},"content":{"rendered":"\n

The Foschini Group has recorded a massive drop in profit for the 2026 year, with trading conditions worsening in South Africa, the UK and Australia. <\/p>\n\n\n\n

In its results for the year ended 31 March 2026, the group’s performance was affected by a weaker second half amid the deteriorating trading conditions.<\/p>\n\n\n\n

“The impact of softer peak season demand and lower gross margins resulted in negative operating leverage,” the group said. <\/p>\n\n\n\n

It also recognised non-cash impairment charges against the Phase Eight brand in the UK and the Tarocash and yd. branches in Australia, reflecting revised cash flow expectations for the businesses<\/p>\n\n\n\n

Its revenue increased by 7.2%, while group sales grew by 7.1%. Excluding the recently acquired White Stuff, group sales only grew by 2.8%.<\/p>\n\n\n\n

The group’s online sales jumped by 31.7% in FY2026, and now contributed 14.8% to total retail sales.<\/p>\n\n\n\n

Gross profit was up 4.5% despite a 120-basis-point decline in gross margin for the year. Group operating profit before brand impairments and acquisition costs dropped by 22.1%.<\/p>\n\n\n\n

Its profit attributable to equity holders also fell from R3.2 billion to R1.3 billion for the period, a decline of 59%.<\/p>\n\n\n\n

Its headline earnings per share declined 33.5% to 675.4 cents per share. The group’s basic earnings per share also declined by 58.1% to 411.2 cents per share.<\/p>\n\n\n\n

The final dividend declared stood at 140.0 cents per share, down 39.1% from the prior year. <\/p>\n\n\n\n

During the year, the group repurchased 10 million shares at a weighted-average share price of R105.89, for a gross consideration of R1,025 million.<\/p>\n\n\n\n

Metric<\/strong><\/td>FY2026<\/strong><\/td>FY2025<\/strong><\/td>% Change<\/strong><\/td><\/tr><\/thead>
Headline Earnings Per Share (HEPS)<\/strong><\/td>675.4 cents<\/td>1,015.6 cents<\/td>-33.5%<\/td><\/tr>
Basic Earnings Per Share (EPS)<\/strong><\/td>411.2 cents<\/td>980.6 cents<\/td>-58.1%<\/td><\/tr>
Final Dividend Per Share<\/strong><\/td>140.0 cents<\/td>230.0 cents<\/td>-39.1%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

Struggles in all three regions <\/h2>\n\n\n\n

<\/p>\n\n\n\n

For TFG Africa, its market share increased by 40 basis points in the homeware and furniture segment, and by 50 basis points in womenswear. However, it declined by 110 basis points in menswear.

Like-for-like sales for TFG Africa increased by 3.5% in FY2026. Online sales increased by 49.2% in FY2026, driven by the growth of the Bash platform.<\/p>\n\n\n\n

Online sales contributed 8.2% to total sales, reaching 10% in Q4, with scale benefits benefiting from improved profitability.<\/p>\n\n\n\n

Credit sales rose by 4.6% in FY2026, contributing 25.8% to total TFG Africa sales. The group took a prudent approach to credit granting. The debtors’ book grew by 5.5% to R9.4 billion<\/p>\n\n\n\n

Nevertheless, TFG Africa saw its gross margin contract by 100 bps to 41.6%. Although costs were well maintained, negative operating leverage led to a 14.7% decline in segmental EBIT.<\/p>\n\n\n\n

TFG London saw sales increase by 29.4% in GBP in FY2026. Sales for the year, excluding White Stuff, remained flat amid difficult trading conditions in the UK.<\/p>\n\n\n\n

The group said that White Stuff continued to perform well, with pro forma sales growth of 4.3% in GBP for FY2026.<\/p>\n\n\n\n

“Performance in the legacy portfolio was impacted by weakness in occasion wear categories, softer department store trading and disruption arising from a significant cyber incident affecting a key online concession partner,” it said. <\/p>\n\n\n\n

TFG Australia saw sales decline by 1.5% for FY2026, with a decline of 3.4% in AUD on a like-for-like basis.<\/p>\n\n\n\n

It said trading conditions in the Australian apparel retail market were challenging in the period. Subdued consumer confidence is impacting demand across the sector, leading to an increase in promotional activity.<\/p>\n\n\n\n

Due to expenses growing ahead of sales from new stores and continued inflationary pressure on expenses, segmental EBIT dropped by 27.2% before impairment of Tarocash and yd. brands. <\/p>\n\n\n\n

What’s next <\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

The South African macroeconomic environment also remained challenging, with subdued economic growth and pressure on consumer disposable income continuing to constrain demand.<\/p>\n\n\n\n

TFG noted that the UK also faces a challenging retail environment, with discretionary consumer demand constrained by elevated living costs.

The group said that profitability will remain dependent on disciplined gross margin and cost management.<\/p>\n\n\n\n

With Australia, inflationary pressures and recent interest rate increases are expected to hurt consumer confidence and discretionary spending, tempering any near-term recovery in retail. <\/p>\n\n\n\n

The group’s management is also continuing to review operating costs, capital expenditure plans and store portfolio economics. <\/p>\n\n\n\n

These reviews are intended to ensure that the stores are positioned for a “possibly prolonged period of constrained consumer demand and changing behaviour.”<\/p>\n\n\n\n

On a somewhat positive note, the group said that gross margins in all 3 territories have started the year approximately 100 basis points higher.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The Foschini Group has recorded a massive decline in earnings amid worsening trading conditions in South Africa, the UK and Australia. <\/p>\n","protected":false},"author":95,"featured_media":862666,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[9214],"class_list":["post-862647","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-tfg"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862647","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=862647"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862647\/revisions"}],"predecessor-version":[{"id":862670,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862647\/revisions\/862670"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/862666"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=862647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=862647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=862647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}