Truworths’s share stumbles

Truworths’s share price fell 5% to R73.22 on Thursday morning after it said retail sales declined 3% to R5.5bn during the first 17 weeks of its financial year compared with the matching period in 2016.

The clothing chain said this was partly because it reported in weeks, and the decline would have been only 2% if the previous 53-week financial year had not shifted the comparative periods by a week.

The company’s share price recovered slightly to close 3% down at R74.70.

Truworths said half of its total sales were “account” and half were cash. Both declined 3%. The group’s trade receivables book decreased 4% relative to the previous period to R5.6bn.

Meanwhile, the percentage of active account holders able to purchase gained ground to reach 85% compared with 83% in the prior period. At its flagship Truworths chain, account sales made up 69% of total sales.

Sales at Truworths stores declined 2% to R4bn despite its trading space growing 3% from the matching period.

Clothes on average were 1% cheaper than in the matching period in 2016, according to the trading update. The group’s UK chain, Office, kept sales level at £89m but contributed a decline measured in rand.

Its trading space increased 1% on the previous period and is expected to increase 2% for the full financial period.

Truworths said that although the trading environment was expected to remain challenging, the group would continue to use its extensive experience to manage the risk of fashion through its “proven merchandise design and buying processes”.

It would also manage the risk of the book through continuing to apply strategies to ensure the health of the portfolio.

The company said its interim results for the 26-week period to December 31 were scheduled for release on or about Thursday, February 22 2018. /

SALES AT TRUWORTHS STORES DECLINED 2% TO R4BN DESPITE ITS TRADING SPACE GROWING 3%