| Imagery Source: Mr Price Group Limited |
| Information Source: Share Net |
| This short-form announcement is the responsibility of the Mr Price board of directors and is a summary of the information in the detailed results announcement available on: https://senspdf.jse.co.za/documents/2025/JSE/ISSE/MRPE/20112025.pdf and https://www.mrpricegroup.com and does not contain complete details. These documents and the results presentation to the investment community are available on the group’s website at www.mrpricegroup.com, and copies may be requested from the company secretary (Legal@Mrpricegroup.com or +27 31 310 8000) at the company’s registered office. Any investment decision in relation to the company’s shares should be based on the full announcement. |
| MR PRICE GROUP INTERIM RESULTS FOR THE 26 WEEKS ENDED 27 SEPTEMBER 2025 |
| For the 26 weeks ended 27 September 2025 (“Period”), Mr Price Group increased total revenue by 5.4% to R18.6bn. The group’s retail sales growth of 5.5% was higher than the comparable market’s sales growth of 5.3% (RLC: April 2025 - September 2025). Despite a highly promotional retail sector for most of the period, the group expanded its gross profit (GP) margin by 30bps to 40.0% and delivered positive operating leverage through strict cost control, expanding its operating margin by 10bps to 11.5%. |
| Basic and headline earnings per share of 512.8 cents and 513.0 cents were up 6.5%. Diluted headline earnings per share grew 6.4% to 497.9 cents. |
| Despite the group’s ability to deliver positive earnings growth for H1, the sales performance is reflective of a consumer environment that remains constrained. The prolonged period of negative real wage growth through 2022 and 2023 has had a lasting impact, compromising household disposable income with resultant weak levels of consumer expenditure. Short-term relief through lower interest rates and inflation has not been sufficient to offset these effects, resulting in limited discretionary spending capacity. Continued negative consumer confidence emphasises this challenging environment. |
| Group CEO Mark Blair said, “I am pleased that we have once again executed our strategic intent of maximising sales growth at improved margins. Our gross margin increased despite a very challenging retail environment. Our value-focused business model enabled us to effectively manage overheads and ensure that we consistently deliver positive earnings growth and returns to shareholders.” |
| An interim dividend of 323.2 cents per share was declared, up 6.5% and a pay-out ratio of 63% was maintained. |
| Group results summary |
| Group retail sales of R17.8bn increased 5.5% and comparable store sales increased 2.1%. Other revenue of R625m decreased 1.6%. |
| The first quarter of H1 was characterised by shifting school holiday periods and base effects, particularly in April and June. The group’s Q1 retail sales growth of 6.3% resulted in market share gains but faced GP margin compression of 20bps due to markdowns required in June. The group, along with the rest of the sector, reported negative sales growth for the month. The timely markdown activity in June and effective stock management enabled it to exit the winter season with a clean stock position. |
| As a result, fresh spring and summer inputs from Q2 enabled more full-priced sales for the remainder of the period, albeit at lower growth levels than Q1, up 4.7% as the consumer environment deteriorated. The rest of the market was highly promotional in these months, with deep discounting prevalent across the sector. Consequently, the group’s sales growth was in line with the market but came at improved GP margins compared to the prior year. |
| Group store sales increased 5.4% and online sales were up 9.7%. The group’s omnichannel strategy continues to be effective and aligned with customers' shopping preferences. Total unit sales increased 2.5% and retail selling price (RSP) inflation of 3.0% remained below CPI, as focus remained on delivering value to customers through the group’s Every Day Low Price model. |
| The group opened 91 new stores during the period, growing its total store base to 3100 stores and increasing weighted average trading space by 3.5%. New stores across the group’s portfolio continue to deliver strong returns. |
| Cash sales increased 5.6% and constituted 88.2% of retail sales. Credit sales grew 4.3%, driven primarily by existing account holders, and the group approved 22.6% of new account applications. The latest TransUnion Consumer Credit Index has signalled a modest improvement in household credit health; however, the group’s strict affordability criteria remain appropriate. |
| The GP margin increased 30bps to 40.0%. Effective stock management ensured a smooth transition out of winter and into fresh spring/summer merchandise, enabling all trading segments to expand their margins in Q2. |
| Profit from operating activities increased 5.7% to R2.1bn. Effective cost control initiatives ensured total expense growth was contained at 5.6%, despite trading space growth. Operating margin increased 10bps to 11.5% of retail sales and other revenue. The group’s operating margin in H1 is typically seasonally lower than in H2. |
| Segmental performance |
| Retail sales for the Apparel segment increased 5.3% to R14.0bn, outperforming the comparable market’s (RLC) sales growth of 4.7% and comparable store sales grew 1.7%. In Q2, retail sales growth slowed for the segment and the comparable market as the consumer environment softened. During the period, Mr Price Apparel maintained market share and expanded GP margin, despite the comparable market’s sales being highly promotional. On a 12-month basis, the division has gained over R200m in market share. Miladys and Mr Price Sport continued to report improved sales growth. Power Fashion reported its 14th consecutive quarter of market share gains and delivered the highest sales growth in the segment, while Studio 88 delivered a solid margin accretive sales performance despite high levels of discounting in the branded apparel competitor environment. |
| The Homeware segment’s retail sales increased 5.1% to R3.2bn and delivered comparable store sales growth of 4.3%. The comparable market was highly promotional throughout the period, while all of the group’s homeware divisions further expanded GP margins, driven by lower markdowns than the prior year. Yuppiechef continued its omni-channel expansion, reporting double-digit sales growth and has now gained market share for 18 consecutive months. |
| The Telecoms segment continued its trend of delivering double-digit sales growth (+12.4% to R678m) and market share gains (+50bps per GfK). Mr Price Cellular’s stand-alone store roll-out momentum continued, with a further 12 stores opened during the period, closing its footprint at 73, in addition to the existing 481 combo stores. The segment further expanded its margins during the period, supported by both the Cellular (handsets and accessories) and Mobile offerings. |
| Financial Services revenue decreased 0.8% to R469m. Debtors’ interest and fees were 1.2% lower due to a 100bps reduction in the repo rate compared to the prior period. The group’s prudent credit-granting approach has enabled it to maintain its net bad debt-to-book ratio at low levels relative to the sector. It remains sufficiently provided for and will continue to manage its debtors’ book cautiously. |
| The group’s inventory management approach is data-led and driven by tried and tested processes. It remains a key competitive advantage which has enabled it to expand its margins despite a volatile period of trade for the sector. At the end of the period, gross inventory was 4.5% higher and stock freshness (0 - 3 months ageing) remained healthy. |
| Capital expenditure of R574m was allocated, and the annual capex forecast of approximately R1.5bn remains, which includes the Gauteng DC enhancement and approximately 200 new stores. The group ended the Period debt-free, with cash resources of R3.0bn, and a cash conversion ratio of 81.8%. |
| Outlook |
| The operating environment in South Africa has continued to mirror the volatility of the global economy. GDP growth improved in Q2 2025, up 0.8% from the 0.1% reported in Q1 2025. However, these levels are not supportive of creating a sufficiently buoyant economy to enable strong business growth. There have been some areas of improvement under the government of national unity, but more significant progress is required in national structural reforms to stimulate job creation and create more sustainable levels of economic growth. |
| The outlook for the consumer environment is fragile in the short-term, with hopeful improvement in 2026 supported by a lower inflationary and interest rate environment. Volatility in spending patterns is likely to persist as the monthly window for consumer spending is limited by constrained disposable income levels. Increasing food inflation and divergence in discretionary spending will likely place an additional drain on the share of wallets. |
| Consumers have become increasingly value-seeking, and the group’s diversified portfolio of brands remains well placed in their customer positioning. Mr Price Apparel remains the most shopped apparel retailer in South Africa (MAPS 2025) and leads the Fashion-value matrix (Borderless Access), highlighting its differentiated fashion and accessible pricing. Mr Price Apparel, Mr Price Sport and Mr Price Home reported the highest brand equity in their respective segments, a leading metric for brand health and customer affinity. Power Fashion reported the highest increase in brand equity, testament to its successful store roll-out strategy and customer acquisition performance. |
| The group’s investment in its brand strength and omni-channel platforms keeps it closely aligned with its customers’ needs. Its ongoing merchandise execution, focusing on delivering affordable fashion trends at high volumes, supported by leading inventory management and an agile supply chain, has enabled it to deliver consistent earnings growth. Its 3-year HEPS CAGR remains well ahead of the competitor set. |
| The base becomes increasingly more challenging in the remainder of the financial year, due to the two-pot withdrawals and combined with improved consumer affordability (lowering inflation and interest rate cuts), which supported increased consumer expenditure ahead of the festive season in the prior year. Sales calls ahead of these key months in 2025 have accounted for these factors and the broader macroeconomic conditions. Significant improvements in the operational capacity of the Durban port have positively impacted stock-flow and inventory management ahead of the key trading months. Retail sales in the first 7 weeks of H2 were up 3.3% against a firm base of 12.3%, with momentum improving from October to November. |
| As has been previously communicated, considerable progress has been made in the group’s strategic research informing capital allocation decisions for future investment. This includes the evaluation of organic and acquisitive growth opportunities in existing and other high-potential markets. |
| Blair said, “I have strong confidence in our team and their ability to continue achieving consistent earnings performances while also delivering for the future. We remain focused on execution across the business and providing value to all our stakeholders.” |
| This short form announcement has not been reviewed or reported on by the company's auditors. |
| For the full document, click the link below |
| Mr Price Group Limited |
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