Clicks Sees Full-Year Earnings Up 5-10% Amid Weaker Spending
Clicks Group Ltd. (CLS), a South African beauty and pharmaceutical retailer, said diluted earnings per share excluding one-time items will grow 5 to 10 percent in the year to end August amid weakening demand.
“Retail trading conditions are expected to remain challenging as consumer spending remains subdued,” the Cape Town-based company said in a statement today. “Selling price inflation will be relatively low for the year and cost pressures will remain as the group continues to invest in pharmacies.”
Clicks shares fell as much as 3.3 percent, the biggest intraday decline since March 18, and were 1.5 percent lower at 9:48 a.m. in Johannesburg. The stock has slumped 12 percent this year.
Diluted earnings per share excluding one-time items grew by 8.5 percent to 142.7 cents in the six months through February, the company said in the statement. Net income rose 9.8 percent to 360 million rand ($39.5 million) while sales advanced 11.4 percent to 8.5 billion rand.
“Constrained consumer spending has resulted in slower revenue growth, compounded by relatively low selling price inflation,” Clicks said.
South African consumer confidence was at a nine-year low in the first quarter of 2013 amid a 24.9 percent unemployment rate and as rising fuel and electricity costs accelerated inflation to the upper limit of the government’s 3 percent to 6 percent target range.
Clicks increased its interim dividend by 10 percent to 48.5 cents per share.
To contact the reporter on this story: Janice Kew in Johannesburg at email@example.com
To contact the editor responsible for this story: Celeste Perri at firstname.lastname@example.org