South African budget retailer Mr. Price Group on Thursday posted a 2.5% drop in comparable store sales for the first four months of its financial year but said it was seeing signs of recovery into the spring and summer.
The news sent the company’s shares down by as much as 12.2% to R154.12 in early trade on Thursday, the worst level since mid-2017.
“Higher-than-desired markdowns were required over the short winter period, diverting customer spend away from full-price merchandise and materially impacting gross margin,” the retailer said.
In the 18 weeks to August 3, total retail sales — including sales to franchisees — edged up 0.5%.
It said a detailed review of its merchandise process was expected to benefit performance in the second half and that its winter inventory was cleared to “acceptable levels”.
Group retail sales over the period inched 0.6% higher but rose 3.6% in the last two weeks of the period, it said in a trading update.
