Massmart Holdings shares climbed after the South African food and goods wholesaler owned by Wal-Mart Stores said earnings gained as much as 37% amid a slowdown in the country's retail sales growth.
The stock rallied as much as 4.1% and traded 1.3% higher at R116.50 as of 2:59 pm in Johannesburg, compared with a 0.3% rise on the FTSE/JSE Africa General Retailers Index.
Massmart earnings per share were R5.69 to R6.14 in the 53 weeks ended December 29, compared with R4.50 in the equivalent period a year earlier, the Johannesburg-based company said in a statement on Wednesday. Massmart said on August 22 it will focus on introducing new lines in its fresh-food, clothing and e-commerce units to drive growth.
South African retailers including Shoprite Holdings, the country's largest food chain, and Truworths International, the biggest listed clothing company, have reported slowing sales growth as consumers struggle to repay debt amid rising unemployment. South African retail sales growth slowed to 3.5% in December from a revised 4.4% the previous month.
Massmart will report full-year earnings on February 27. Last year, the company changed its reporting period to align itself with Arkansas-based Wal-Mart, meaning that last February Massmart reported first-half earnings.