The share price of South African clothing retailer Edcon rose by 2% or R5,50 in early trade on Thursday after the group reiterated that it expects its headline earnings per share (Heps) for the year to the end of March 2005 to be 60% higher than those of the previous year.
Edcon also reported a 24% rise in sales and a 26% rise in gross profit for the 13 weeks to January 1 2005, compared with a year earlier.
By 10.15am, Edcon shares were quoted on the JSE Securities Exchange (JSE) at R276,50 versus R271 at Wednesday’s close, with 48 126 shares having changed hands in 93 trades. This compares with the gain of only 0,38% seen in the FTSE-JSE General Retail Index (J052) over the morning.
Edcon’s retail chains include Edgars, Jet, CNA, Jet Mart and Boardmans. The group said that of the expected 60% rise in Heps, 7% would be due to the extra trading week included in the period compared with the previous year.
Edcon’s sales over the December holiday period were particularly strong, the retailer revealed, up 32% year-on-year for the month. South Africa’s current favourable retail environment, supported by low interest rates, real wage growth and higher consumer confidence, had extended into the period.
Edgars experienced a 22% sales increase for the quarter, a 7% increase in retail space and a negative 2% inflation. Edgars contributed 49% to overall Edcon sales.
Jet’s sales were up 28% for the quarter, while there was a 6% increase in retail space and 20% deflation. Jet contributed 39% to overall Edcon sales.
CNA’s sales showed a 5% increase for the quarter, a 9% increase in retail space and 2% deflation. CNA contributed 7% to overall Edcon sales.
Boardman’s contributed 2% to overall Edcon sales, but no other comparative figures were available for the same period last year, as the acquisition only became effective on April 1 2004.
Jet Mart experienced a 1% sales increase for the quarter, a 26% increase in retail space and 13% deflation. Jet Mart contributed 3% to overall Edcon sales.
“Even more impressive was that the results were achieved with deflation in Edgars of 2% and Jet of 20%, while average trading space increased by 7% in Edgars and 6% in Jet,” the company said. — I-Net Bridge