Massmart braces for grim interim earnings
Interim profit could fall by nearly 70%, thanks to restructuring costs, the Walmart-owned retailer says
Massmart, owner of household brands such as Makro and Game, is braced for more pain as its lower-earning customers are being left out of the country’s economic recovery. The subsidiary of Walmart, the biggest retailer in the world, said interim earnings could fall around 70% to end-March. Investors punished the company by pushing its shares down almost a fifth, the largest one-day drop on record. Earnings would be hit by restructuring costs of about R166m, with some of its staff departing instead of relocating from Durban to Johannesburg. "Whilst the positive impact of SA’s political renewal has been good for business confidence, there is little sign currently of any economic recovery among our lower-and middle-income consumers," said Massmart CEO Guy Hayward. On Thursday, the company gave some indication of the rising pressure on SA’s consumers in a frank trading update that pointed to a tough year for retailers. It is also a signal that rising confidence since the election of Pres...
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