Retailer Woolworths Holdings said on Tuesday it expects full-year earnings to rise by as much as 30%, helped by a recovery in consumer spending in Africa’s top economy.
Woolworths, which targets higher-end shoppers of food and clothing, said in a statement that headline earnings per share for the year to June 26 likely rose by 20% to 30%.
Headline earnings per share, the main measure of earnings in South Africa, excludes certain one-time items.
Total sales rose 9.4%, the company said, while same-store sales were up 6.3%.
Consumer demand is recovering in South Africa after a contraction in 2009, helped by 6.5 percentage points of interest rate cuts that have pushed borrowing costs to historic lows.
However, analysts and fund mangers caution the recovery is not enough to justify the high valuations of retailers.
Shares of Woolworths, which this month hit a lifetime high, are up nearly 15% so far this year, outpacing Johannesburg’s All-share index which is lower on the year. — Reuters