JSE retailers’ woes in the spotlight
Thursday’s focus is on retailers, with results from Woolworths and Walmart’s South African subsidiary, Massmart.
Both have issued trading statements warning of substantial profit declines.
On Tuesday, Shoprite’s share price fell 4.15% after it reported a 4% drop in diluted headline earnings per share (HEPS) and cut its dividend.
Woolworths said in a trading statement on July 19 it expected to report on Thursday its HEPS for the 52 weeks ended June 24 declined by up to 20%.
Woolworths said its food division grew sales by a "market-leading" 8.4%, but its clothing division’s sales fell 1.5%.
In Australia, its Country Road clothing chain grew sales by 1.7% while department store chain David Jones’s sales declined 0.9%.
In its interim results, Woolworths booked a A$712.5m (about R7.5bn) impairment of David Jones.
Massmart told shareholders on July 30 it expected to report on Thusday that its interim HEPS for the 26 weeks to end July 1 declined by up to 47%.
Massmart said the interim results would show a sales decline of 2.2%, but this was due to an accounting change whereby associate Shield’s sales were included in the first half of its 2017 financial year but not in the latest results.
If Shield was excluded from the comparative period, the group’s sales grew 1.9%.
Profits were dragged down by relocation costs of R166m, Massmart CEO Guy Hayward said at the annual general meeting in May.
Sibanye-Stillwater said on August 3 it expected to report earnings for the six months to end-June more than doubled.
"The significant improvement year on year primarily reflects inter alia, the improved operational performance from our platinum group metals operations, the inclusion of a full six months from the US region, compared with two months in first half of the 2017 financial year and no material nonrecurring items," Sibanye said in its trading statement.
South32’s share price was up 5.52% at A$3.44 in Sydney after it released its 2018 financial year results, showing 8% growth in net profit to $1.33bn.
The rand, which strengthened to R14.15 to the dollar on Wednesday, had slipped back to R14.32 by 6.20am on Thursday morning.
The rand was trading at R16.54 to the euro and R18.43 to the pound.
Asian markets were mixed, giving little clue as to the JSE’s direction. In Hong Kong, Naspers’s 31%-owned Tencent was down 0.17% to HK$358.80 while in Sydney, BHP was up 1.32% at A$32.50.