Mr Price cuts its cloth to suit a higher share price
The retailer said in a trading update that it expected interim earnings to grow by up to 25%
Retailer Mr Price’s turnaround strategy has paid off as the group expects earnings per share to climb as much as 25% for the 26 weeks to September 2017. The share price jumped 11% to R169.99 after the announcement. The momentum continued for most of the trading session, with the share eventually closing at R192.25. Diluted headline earnings per share are expected to rise between 421.4c and 439c. Portfolio manager at Gryphon Asset managers Casparus Treurnicht said although the company did not give much information, it was clear that the guided range was significantly higher than the market expected. “After Truworths and TFG came forward last week there might be a combination of short positions being covered and a sigh of relief,” Treurnicht said. Mr Price’s share price recovery came after it lost 20% in 2016. The main losses came in August 2016 when the company lost 16% in one day after releasing a disappointing trading statement. The share price has since gained about 20% in 2017. I...