Bloomberg News

Truworths Sees First-Half Sales 15% Higher, Warns Credit Weaker

January 18, 2013

Truworths International Ltd. (TRU), South Africa’s sixth largest clothing retailer, said sales in the first-half through December rose 15 percent even as more consumers struggle to meet payments on store cards.

Revenue increased to 5.5 billion rand ($617 million) compared with a year earlier while sales at stores open for more than a year rose 10 percent, the local owner of brands such as Uzzi and Daniel Hechter said in a statement. Earnings per share for the period are expected to be 16 percent to 20 percent higher, Truworths said.

“Credit sales contributed 72 percent to retail sales” compared with 73 percent a year earlier, the Cape Town-based company said. “The credit environment has become more challenging with consumer delinquency levels increasing nationally.”

Africa’s biggest economy probably expanded at the slowest pace since the 2009 recession last year, putting pressure on consumer spending. South African retail sales growth quickened in November, increasing 3.4 percent from a year earlier, having fallen in the two previous months.

Fellow South African retailers Mr Price Group Ltd. (MPC) and Shoprite Holdings Ltd. (SHP) put out worse-than-expected trading updates earlier this week, causing a sell-off in retail stocks.

Truworths rose 0.4 percent to 100.10 rand by 2:38 p.m. in Johannesburg, rising for the first time in seven days. About 1.5 million shares changed hands, about the same as the three-month daily average.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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