Truworths Profit Exceeds Estimates as Sales Growth AcceleratesJanice Kew
Truworths International Ltd., the South African retailer that’s acquired two children’s clothing companies this year, posted annual profit that beat analysts’ estimates amid an improving second-half performance.
Net income rose 2.6 percent to 2.47 billion rand ($191 million) in the 52 weeks through June 28, the Cape Town-based company said in a statement Thursday, exceeding the 2.43 billion-rand average estimate compiled by Bloomberg. Retail sales increased 12 percent in the second half of the financial year, compared with the first half’s 5.2 percent growth.
Truworths bought Earthchild Clothing (Pty) Ltd. in March and the South African clothing-retail business of Naartjie a month later as it seeks growth opportunities. South African retailers have struggled as the country’s high unemployment, power cuts and rising fuel prices curb consumer spending.
“Management feels that the credit environment is steadily improving despite the current tough economic environment,” Truworths said. Retail sales, excluding Earthchild and Naartjie, rose 15 percent in the first seven weeks of fiscal 2016, compared with a year earlier, the company said.
Truworths shares rose 7.1 percent to 87.20 rand at 4:16 p.m. in Johannesburg, the biggest gain in six months and reversing an earlier decline. Earnings excluding one-time items climbed 4 percent to 5.92 rand a share, while the company raised the dividend 5.2 percent to 4.05 rand a share.