Woolworths Earnings Climb on Higher Income Earners Resilience
Woolworths Holdings Ltd. (WHL), a South African food and clothing retailer, posted a 27 percent increase in first-half earnings helped by demand from higher-income consumers.
Net income advanced to 2.6 billion rand ($252 million) in the 53 weeks through June, the Cape Town-based retailer said in a statement today. That beat the 2.5-billion rand estimate of 11 analysts surveyed by Bloomberg. Sales rose 23 percent to 35.4 billion rand, compared with 12 percent growth in the previous fiscal year.
“We believe that economic conditions in South Africa will remain constrained, especially in the lower and middle income segments of the market where consumer debt levels remain under pressure,” Chief Executive Officer Ian Moir said in the statement.
Woolworths’s gain bucked a trend of slowing sales growth among South African retailers. Shoprite Holdings Ltd., South Africa’s largest retailer, and Massmart Holdings Ltd. (MSM) last week said that sales growth slowed as consumers struggle to repay debt and unemployment rises, with lower income earners particularly under pressure.
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