Shoprite Holdings Ltd., South Africa’s largest retailer by market value, fell the most in more than six years after reporting Christmas sales growth below that of last year.
The stock retreated 5.9 percent to 188 rand in Johannesburg, the biggest drop since November 2006. The shares are on a five-day falling streak, the longest since Sept. 5, according to data compiled by Bloomberg. Shoprite is the second-worst performing stock on the FTSE/JSE Africa All Share index this year, having declined 8.1 percent.
December sales grew 11 percent compared with last year, the Cape Town-based company said in a statement today, against a 16 percent gain in the corresponding month a year earlier and a 14 percent increase over the second half of 2012.
“It is the disappointing sales growth in the festive season and that’s probably the main reason driving the share price down today,” said Michael McLeod, an analyst at Avior Research, in a phone interview from Johannesburg today.
Shoprite said revenue advanced 14 percent to 46.7 billion rand ($5.37 billion) in the six months through December, driven by a 12 percent gain in its core South African market and a 28 percent increase in supermarkets outside the country.
Non-South African operations were helped by a weaker rand, which retreated 7.4 percent against the dollar in the period amid a slowdown in economic growth caused in part by widespread strikes in the mining industry. Food prices for Shoprite climbed on average 4.3 percent in the six months, lower than the “official figure” for food inflation of 5.9 percent, the company said.
Shoprite’s update “was weaker than expected,” said Jeanine Womersley, an analyst at Renaissance Capital, in a phone interview from Cape Town. “This was largely driven by weaker performance of its core South African businesses.”
Furniture sales advanced 4.8 percent during the half year, “remaining more negatively impacted by the present economic conditions,” the company said.