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Trading update for the 13 weeks ended 31 December 2016
Mr Price Group Limited
(Registration number 1933/004418/06)
Incorporated in the Republic of South Africa
ISIN: ZAE000200457
JSE share code: MRP
("Mr Price Group" or "the Group" or "the Company")
TRADING UPDATE FOR THE 13 WEEKS ENDED 31 DECEMBER 2016
During the third quarter (2 October 2016 to 31 December 2016) of
the financial year ending 1 April 2017, on a statutory reporting
basis, the Group recorded growth in retail sales and other
income of 0.4% to R6.4bn over the corresponding period in the
prior year (“Corresponding Period”). Total retail sales of
R6.1bn (including franchise) were 0.5% lower (comparable stores
-2.9%) than the corresponding period, while sales growth in
corporate owned stores was as follows:
Total Comparable Trading
Sales Store Sales Space
MRP Apparel -1.9% -4.1% 4.9%
MRP Sport 3.9% -3.7% 6.0%
Miladys -0.7% -1.3% 0.0%
MRP Home 1.8% -1.7% -2.7%
Sheet Street 5.0% 5.0% -0.2%
Total -0.4% -2.8% 2.3%
On a like-for-like (“LFL”) reporting week basis, which adjusts
for the shift in trading weeks as a result of the 53rd week in
the base and is a more accurate basis on which to measure
performance, sales growth in corporate owned stores was as
follows:
Total Comparable
Sales Store Sales
MRP Apparel -1.1% -3.3%
MRP Sport 2.6% -4.9%
Miladys -0.6% -1.2%
MRP Home 1.2% -1.0%
Sheet Street 5.0% 4.8%
Total 0.0% -2.2%
On the same LFL basis, monthly sales growth reflected an
improving trend in festive season trade. Group sales in December
increased by 3.9% as follows:
Total Comparable
Sales Store Sales
MRP Apparel 4.3% 2.2%
MRP Sport 1.9% -5.0%
Miladys 4.0% 3.1%
MRP Home 2.0% -0.8%
Sheet Street 5.3% 5.2%
Total 3.9% 1.6%
Cash sales, which constitute 83.2% of total sales, decreased by
0.5%. Credit sales growth, which had slowed significantly as a
result of consumer caution and legislative changes impacting new
account applications, showed an improvement from the reduction
at the half year, and increased by 0.3% over the corresponding
period. The debtors’ book, which grew by 1.8% at period end,
continued its positive performance, with collections for the
quarter exceeding forecast.
As anticipated, the difficult trading environment referred to at
previous reporting periods, has extended into H2. Poor economic
growth, low levels of consumer confidence and higher selling
prices driven by a weak and volatile exchange rate has resulted
in a very competitive retail environment, with persisting high
levels of price discounting and promotional activity. Retail
selling price inflation for the period was 10.8%.
Given this situation and the need to manage inventory levels
going into the new year, higher promotional markdowns were
required, particularly in MRP Apparel. Although this has
impacted gross margin, group inventory has been well managed,
decreasing by 5.0% and generally being in better shape than at
the end of Q3 last year.
Other income grew by 23.7% to R284.4m, with double digit growth
being achieved in all major revenue types, namely debtors’
interest and fees, cellular and insurance.
Looking ahead, any improvement in economic growth and consumer
health is likely to be gradual. Despite this, the group is
hopeful that a more settled economic environment will aid
planning and result in lower merchandise input costs. The early
positive signs of focused effort, particularly on MRP Apparel
and Miladys merchandise and credit sales are encouraging.
The above-mentioned figures and any information contained herein
do not constitute an earnings forecast and have not been
reviewed and reported on by the Company’s external auditors.
Durban
17 January 2017
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Ltd)
Date: 17/01/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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