“As reported at the year-end results presentation in May 2017, given the current low-growth economy and resultant poor retail environment, the most significant near-term opportunity is to regain lost market share in the two divisions, MRP Apparel and Miladys, which underperformed in the previous financial year,” the group said.
The group reported in the trading update that for the first four months of its 2018 financial year, total retail sales were up 6.2% in the 18 weeks to August 5. For April, May and June, MRP Apparel and Miladys reported sales growth of 10.1% at current prices, far ahead of the 4.8% growth that Statistics SA reported for the retail sector.
The trading statement was well received, with Mr Price’s share price closing 3.45% higher at R187.50 on Friday.
Sales growth in the overall apparel segment, which includes MRP Sport, was 8.7% in the 18 weeks to August 5. The homeware division struggled, however, with sales declining 1%, due to a 2.1% fall in sales at MRP Home, partially offset by a 1.7% increase at Sheet Street.
Online sales were 6.4% higher. Those at MRP Sport and MRP Home growth tracked physical store sales growth, while MRP Apparel recorded very strong growth of 20.1%.
Group cash sales increased 6.3%, making up 82.6% of total sales. Credit sales increased 5.4%. Weighted average trading space was 2.6% higher.
Other income grew 3.4%, to R372.0m. Debtors’ interest and fees grew 7.7% and insurance revenue climbed 18%.
A temporary slowdown in cellular revenue growth, which fell 8.1%, resulted from a focus on process improvements and product mix changes.
Commentators expect some respite for the retailer sector in the last quarter of 2017.