Holdsport boasts core strength

JSE-listed Holdsport reported a double-digit increase in full-year core earnings yesterday, showing some resilience in a constrained consumer environment.

JSE-listed Holdsport reported a double-digit rise in full-year core earnings yesterday, showing some resilience in a constrained consumer environment.

In the year to end-February, the owner of Sportsmans Warehouse and Outdoor Warehouse said core headline earnings per share had risen 21.3% to 548.7c. The Holdsport portfolio includes Performance Brands, a wholesale business that houses the First Ascent and Capestorm brands.

The group said operating profit had increased 15.8% to R 308.9m, while total sales were up 11.8%, to R1.7bn, compared with the year-earlier period. Holdsport declared a final gross dividend of 200c per share.

The increase in trading space and the effect of the weaker exchange rate on the cost of imported stock had resulted in a decrease in cash generated from operations, the company said.

Holdsport said it had signed lease agreements for a further two new stores to be opened in the next financial year and planned to relocate one store.

Absa Stockbrokers said that earnings from apparel retailing could decline, as they were heavily dependent on discretionary income.

“When the economy is performing well, jobs are being created, and consumer disposable incomes are rising, apparel retailers flourish. But when consumers start feeling the pinch, discretionary items are shunned,” it said.

Despite the weaker economy, “Holdsport’s small branch network, operating leverage, and compelling store economics provide it with excellent growth avenues to at least keep its numbers on an even keel.”