The Foschini Group's sales in Africa recovered in the last three months of its financial year to end-March 2026 but was insufficient to recover the margins lost over the previous three quarters of weak trading, including over the traditionally peak third quarter's trading.
Image: File/ Leon Nicholas
The Foschini Group (TFG) has warned shareholders it will report a worse than expected -40% to -30% decline in headline earnings per share due to weak trading in South Africa, a R750 million impairment of brand values and higher interest.
Investors reacted negatively to the trading statement, with the share price falling 3,12% to R69,16 on the JSE on Friday, continuing a 12-month steady decline in the price from R134 per share.
The clothing and accessories retailer operating in South Africa, the UK, and Australia said Friday it expects headline earnings per share to be between 609,4 cents per share and 710,9 cents per share for the year to March 31, 2026, compared with 1,015,6 cents the year before.
In March, the group already warned that both earnings per share and headline earnings per share were likely to decline when compared with 2025.
Earnings per share had been impacted by a R750m net of tax non-cash impairment of the brand values of Phase Eight in TFG London, and Tarocash and yd. in TFG Australia, a trading statement noted.
Also, while sales momentum and gross margin in the Africa segment normalised in the fourth quarter, it was insufficient to recover the margin lost during the year up to and including peak season in the third quarter.
As a result, TFG Africa’s earnings before interest and tax were likely to decline at a mid-teens rate, year-on-year.
The decline in headline earnings per share was further impacted by the weaker trading in the London and Australia segments in the final quarter, and higher interest and IFRS 16 costs.
The group had increased sales by 7,1% in the three months to March 28, and excluding White Stuff, its newest acquisition, sales grew 2,8%, the statement said.
Trading conditions for its TFG Africa division remained challenging, with consumer spending still constrained.
Heightened geopolitical tensions in the Middle East have contributed to an uncertain global environment.
Its fourth-quarter sales were up 7,5% and by 5,5% on a like-for-like basis. For the full year, sales were up by 5% and by 3,5% on a like-for-like basis.
At TFG London, fourth-quarter sales grew 1,9% and by 29,4% for the full financial year in UK pounds. Sales excluding White Stuff (acquired in October 2024) remained flat.
The UK continued to experience difficult trading conditions. White Stuff continues to perform well, with pro forma sales growth of 4,3% for 2026.
At the TFG Australia division, consumers remain value-oriented amid tough trading conditions, with sales contracting 1,3% for the fourth quarter and declining 1,5% for the 2026 financial year in Australian dollars.
TFG's annual financial results for the year are expected to be announced on or about June 5, 2026.
On the outlook, the group said geopolitical uncertainty is still expected to contribute to elevated input costs and cautious consumer behaviour, with management focusing on cost discipline and operational efficiencies.
The group, however, maintained a sound balance sheet position, supported by committed banking facilities and prudent working capital management.
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