Clicks Group Ltd. (CLS)’s full-year earnings rose 9.6 percent as the South African cosmetics and music retailer used price promotions to win customers unwilling to spend money.
Earnings per share in the year through Aug. 31 increased to 2.72 rand from 2.48 rand a year earlier, in line with the average estimate of analysts surveyed by Bloomberg. Sales jumped 9.5 percent to 16.2 billion rand ($1.88 billion) with middle- income consumers remaining under financial pressure, the Cape Town-based company said today in a statement.
“The health and beauty markets have been reliant on promotional activity to sustain sales volumes and attract value- conscious consumers,” David Kneale, chief executive officer, said in the statement.
South African retail sales in August increased 6.4 percent on a yearly basis, Pretoria-based Statistics South Africa said yesterday, accelerating from a revised 2.9 percent growth in July. The country’s central bank cut interest rates by 0.5 percentage point to 5 percent on July 19 to stimulate the economy as the debt crisis in Europe damped exports. Consumer confidence was near a four-year low in the quarter.
Clicks fell as much as 1.5 percent to 57.15 rand and was trading down 0.6 percent at 9:33 a.m. in Johannesburg. That pared the stock’s gain this year to 28 percent.
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