The shares declined as much as 8%, the most since April 22, and traded 7.6% lower at R61.90 as of 10:32 am in Johannesburg, a one-month low. The stock has gained 18% this year, valuing the company at R30.3 billion ($2.2 billion). Larger competitor Shoprite Holdings shares are down 8.4% this year.
“Headline earnings per share were lower than I expected,” Kyle Rollinson, an analyst at Avior Capital Markets who has an “underperform” rating on the stock, said by phone. The shares have rallied this year, more than most competitors, “so there is likely some profit taking,” he said.
South African retailers are battling with consumer confidence that remains depressed as shoppers hold back on spending and use of credit even as fuel prices fall, First National Bank said on Thursday. Unemployment of 25% and almost daily power cuts earlier this year also weighed on households.
Earnings per share will increase by between 15% and 25% in the six months through August, the Cape Town-based company said in a statement on Friday. Revenue growth was 8.5% in the period, compared with 6.1% a year earlier.
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