South African retailer Shoprite Holdings expects its annual headline earnings to rise by as much as 14.7%, supported by steady sales growth and continued expansion in its core grocery business.
Africa’s largest supermarket group said merchandise sales from continuing operations for the 52 weeks ended June 28 increased 7.2% to approximately 270.8 billion rand ($16.7 billion), compared with 252.7 billion rand recorded a year earlier.
Shoprite expects headline earnings per share (HEPS) from continuing operations to range between 14.98 rand and 15.66 rand, representing an increase of between 9.7% and 14.7% from the previous year’s restated figure of 13.65 rand.
Diluted HEPS is also expected to increase within the same range.
Investors responded positively to the earnings outlook, with Shoprite shares rising 5.19% at 0836 GMT on Wednesday.
The group’s core Supermarkets South Africa division, which accounts for 84.5% of total group sales, recorded a 7.1% increase in sales to 213.5 billion rand.
Like-for-like sales increased 2%, while internal selling price inflation remained relatively subdued at 0.8%.
The company’s internal inflation rate was significantly below South Africa’s food and non-alcoholic beverages inflation rate of 3.9%, indicating that Shoprite continued to operate in a relatively competitive pricing environment.
Shoprite also recorded strong growth from its supermarket operations outside South Africa.
Sales from the international supermarket business increased 11% in rand terms and 7.1% on a constant-currency basis.
The results highlight the continued contribution of Shoprite’s grocery operations to the group’s overall performance, with sales growth across both its domestic and international markets supporting expectations of higher annual earnings.
