Whistles and Hobbs owner outperforms the market despite challenges
Share of The Foschini Group (TFG) rose over 2% on Thursday after the company released its latest half-year results and showed that it's outperforming a difficult market.
The owner of the Whistles, Hobbs and Phase Eight brands had said that in all three of its major territories, South Africa, the UK and Australia, trading conditions “remained difficult and constrained during the first half “ but that it “delivered a strong result for the period with good performance in each of the territories relative to our respective peer groups.”
Headline earnings growth increased 14.3% to ZAR1.2bn, while retail turnover increased by 28.6% to ZAR15.9bn. Its gross margin expanded to 53.6%, compared to 51% a year ago and the company now has over 4,000 stores in 32 countries.
Group retail turnover for the six-month period may have been up almost 30% overall, but the performance varied widely across the group. Turnover rose by 50.7% (in GBP) for TFG London, by 8.4% (in ZAR) for TFG Africa and by 170.7% (in AUD) for TFG Australia.
But including comparable numbers for Hobbs in the UK and RAG in Australia that were acquired during the previous financial year, turnover grew by 2.3% and 14.9% respectively for TFG London and TFG Australia. That UK figure may not look especially impressive, but in a market beset by store closures, fashion retailer failures and cautious consumers, it’s really not bad.
The company also said that TFG London’s “comprehensive omnichannel offering enabled online turnover growth of 15% for this channel, in a market where trading has shifted rapidly from high street to online retail.”
But TFG London’s gross margin dipped to 63% from 63.6%, which is perhaps no surprise given how tough and promotional the UK market has been.
"We expect trading conditions to remain challenging in all three of our major territories as consumer spending and business confidence remain under pressure," the company said.
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