Mr Price Upbeat as Online Sales Shoot Upwards

Author: Fin24

Mr Price’s online sales have continued on a sharp upward trajectory, contributing to a marked year-on-increase in overall earnings, the group has said.

Mr Price recorded 7.4% growth year-on-year in retail sales and other income, to R7.4bn, during the first four months of the financial year ending 30 March 2019, it said in a statement on Thursday.

Online sales recorded strong growth during the period, Mr Price said, increasing by 28.1% to 83.2m. The MRP Apparel online channel achieved sales growth of 37.6%, while MRP Home saw 19.5% and MRP Sport saw 31.3%.

Cellular and mobile revenue, meanwhile, increased 56.7% to R196.5m, which Mr Price attributed mainly to the ongoing roll out of in-store cellular kiosks.

Total retail sales, including sales to franchisees, of R6.9bn were 6.5% higher than the corresponding period in the previous year.

Group cash sales increased 7.0%, constituting 82.9% of total sales and credit sales reflected growth of 4.1% Mr Price said.

South African sales increased 6.4% to R6.4bn, while sales in non-South African corporate-owned stores grew 9.1% to R520.8m.

This growth was helped along by the inclusion of previously franchised Kenyan stores from late May 2018, Mr Price said.

Excluding Kenya, corporate-owned store growth was 1.8%.

Sales to franchisees decreased 30.9%, the company said, although excluding Kenya, sales were up 11%.

New store openings and expansions meant weighted average trading space increased by 3.1%, though after store closures and reductions were taken into account, net weighted average trading space was up 1.8%.

Other income grew by 23.5% to R459.4m, while debtors’ interest and fees grew 6.9% to R160.1m, with insurance revenue of R85.5m increased to 6.9%. Other sundry income increased 2.8% to R17.3m.

Retail selling price inflation, including the impact of product mix changes and lower markdowns, was 4.2%.

“The retail environment is expected to remain highly competitive until more robust economic growth is attained in South Africa,” the statement said.

“In addition, international trade wars have weighed down on emerging markets. Navigating the impact on consumers of a stagnant economy and a weak ZAR/USD exchange rate is a top priority and we are confident that our fashion, everyday low-price business model is well-positioned to offer great value to customers under these constrained conditions.”

Mr Price shares [JSE: MRP] were trading at R239.47 at 10.24 on Thursday morning, down 0.12%.