JOHANNESBERG, Feb 3 – South African discount retailer Pepkor Holdings reported higher first quarter revenue, supported by recent acquisitions, steady demand for low priced clothing, and strong sales of technology products during the festive trading period.
Revenue as at December 31 rose from 12.9 percent to 29.9 billion rand ($1.9 billion), the company said in a statement. Group sales from continuing operations increased 10.6 percent from the same period a year earlier and rose 5.2 percent on an organic basis, excluding acquisitions. Like for like sales also grew by 3 percent during the quarter.
Pepkor shares gained 3.7 percent to 27.45 rand by mid morning trade, reflecting investor response to the update.
The clothing and general merchandise segment remained the group’s largest contributor. Sales in the unit increased 10.3 percent to 21 billion rand, supported by growth in the core PEP brand and the Brazilian clothing chains. The performance also reflected the inclusion of the Legit, Swagga, and Style fashion businesses, which were acquired during the period.
Furniture, appliances, and electronics sales rose 13.7 percent to 4.1 billion rand. Pepkor said demand for technology products remained firm, while the acquisitions of OK Furniture and House and Home supported growth in the category.
Revenue from the financial services business increased 47.6 percent to 2.4 billion rand, making it the fastest growing segment. The company said demand for insurance products, retail credit, and cellular device rentals remained strong despite pressure on household budgets.
Pepkor said trading conditions remained challenging, with consumers under strain from high living costs and competition across the retail sector intensifying. However, management said it remains cautiously optimistic about performance for the rest of the financial year as the comparative base normalises and execution across its retail and financial services operations continues.
The group operates in a highly competitive discount retail market, competing with chains such as Mr Price, Pick n Pay Clothing, and TFG’s Jet. Last week, Mr Price reported slower sales growth of 3.6 percent in its third quarter, underscoring the pressure facing South African retailers.
Pepkor said its focus remains on driving volume growth through value pricing, strengthening its brand portfolio, and expanding its financial services offering to support earnings momentum over the medium term.
