Truworths Credit Sales Hurt Growth as S. African Debt Rises

Truworths International Ltd. (TRU), South Africa’s largest listed clothing retailer, reported full-year earnings below estimates as more credit customers missed payments.

Net income rose 8 percent to 2.4 billion rand ($233 million) in the 53 weeks through June 30, the Cape Town-based company said in a statement today. That missed the 2.5 billion rand median estimate of nine analysts surveyed by Bloomberg. The company raised the dividend 11 percent to 362 cents.

South African unsecured lending levels “are unlikely to improve in the 2014 financial period and restrictive credit granting criteria will limit account acquisition and credit sales,” Truworths said. Credit sales, which account for 72 percent of total retail sales, grew 9 percent, the company said.

Truworths shares declined 1 percent to 82.60 rand by the close in Johannesburg. The FTSE/JSE Africa General Retailers Index fell 1.6 percent.

South African retail sales rose at the slowest pace in nine months in June as rising joblessness weighed on spending. The number of South Africans with impaired credit records rose by 189,000 to 9.53 million in the first quarter, the National Credit Regulator said in June.

The Truworths statement comes two days after Shoprite Holdings Ltd. (SHP), Africa’s largest retailer, said rising costs for households would continue to damp consumer spending.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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